Enforcing Non-Compete Provisions: A Recent Decision Raises the Risks Nationwide

Originally published July 8, 2005

A recent decision by the Eleventh Circuit Court of Appeals has significant implications for franchisors seeking to enforce their non-compete agreements. In April, that court held that a post-employment non-compete agreement declared invalid in Georgia is also invalid in all other states.

The case, Palmer & Cay, Inc. v. Marsh & McLennan Companies, Inc., involved an insurance sales executive seeking to nullify his non-compete agreement with his former employer. In 2003, the executive, James B. Meathe, left Chicago-based Marsh & McLennan (Marsh) and moved to Georgia to become president of one of Marsh’s competitors, Savannah-based Palmer & Cay. Taking this new job appeared to violate his non-compete agreements, which generally barred Meathe from soliciting clients with whom Meathe had dealt while employed by Marsh and from accepting unsolicited business from them for two years. The