Restrictive Covenants and Trade Secret Protection Covenants in Sale of Business Transactions

RESTRICTIVE COVENANTS AND
TRADE SECRET PROTECTION COVENANTS
IN SALE OF BUSINESS TRANSACTIONS

by Alex Woollcott

I. Georgia’s New Restrictive Covenant Act

• On May 11, 2011, Georgia Governor Perdue signed into law Georgia’s new Restrictive Covenant Act (the “New Act”). While restrictive covenants ancillary to employment relationships are clearly the primary focus of the New Act, there are provisions in the New Act directly relevant to restrictive covenants ancillary to the sale of a business.

• Case law prior to the New Act liberally enforced restrictive covenants ancillary to the sale of a business. The New Act, interestingly enough,

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Update: Georgia Restrictive Covenant Act

Update: Georgia Restrictive Covenant Act

The Georgia Legislature has taken its first step toward resolving constitutional questions regarding the new Georgia Restrictive Covenant Act (the “Act”).

As discussed in an earlier alert, the Act was intended to take effect on November 3, 2010, immediately following Georgia voters’ ratification of a Constitutional amendment designed to give effect to the Act. However, because the Constitutional amendment itself failed to include an effective date, the amendment did not take effect until January 1, 2011, two months after the Act. As a result, the Act was exposed to possible constitutional challenge, including questions as to

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