open-agreements 0.7.6 → 0.8.0

package/skills/legal-explainers/non-compete-contract-explainer/content/georgia.md

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+---
+jurisdiction: "Georgia"
+slug: georgia
+countryCode: US
+snapshotAsOf: "2026-06-19"
+lastReviewed: "2026-06-03"
+canonicalUrl: https://openagreements.org/practice-guides/non-compete/us/georgia
+license: CC BY 4.0
+stale: false
+---
+
+> [!IMPORTANT]
+> **Informational only — not legal advice.** This is a snapshot of an OpenAgreements practice note,
+> provided for general information. It is not legal advice, does not create an attorney-client
+> relationship, and is not a substitute for a licensed attorney in the relevant jurisdiction.
+> Laws change; verify against the canonical version before relying on it.
+>
+> **Canonical:** https://openagreements.org/practice-guides/non-compete/us/georgia · **Snapshot as of:** 2026-06-19 · License: CC BY 4.0 · © openagreements.org
+
+# Non-Competes in Georgia[^about]
+
+A question-by-question summary of Georgia non-compete law under the Georgia Restrictive Covenants Act (O.C.G.A. §§ 13-8-50 to 13-8-59), covering the reasonableness standard, the employee-category limits, the two-, three-, and five-year durational presumptions, implied geographic scope after Wimmer, customer and employee non-solicitation covenants, material contact, judicial modification (blue-pencil), choice-of-law limits under Motorsports of Conyers, tolling and the no-equitable-extension rule of Daneshgari, confidentiality and trade-secret alternatives, physician covenants, and the May 11, 2011 effective date.
+
+
+## At a glance
+
+| Question | Georgia |
+| --- | --- |
+| **Are non-competes enforceable?** | Allowed if reasonable |
+| **Bottom line** | Georgia enforces non-competes that are reasonable in time, area, and scope under the Restrictive Covenants Act, but only against employees who perform covered higher-level job functions. |
+| **Main law or case** | Georgia Restrictive Covenants Act, O.C.G.A. §§ 13-8-50 to 13-8-59 |
+| **Main exceptions** | Employee-category gate (§ 13-8-53(a)); longer presumptions for distributors/franchisees (3 yr) and sellers (5 yr+) |
+| **Can a court narrow it?** | Yes — rewrites to reasonable |
+| **Applies to contractors?** | — |
+| **Restriction extended during a breach?** | No — courts will not extend beyond expiration |
+| **Maximum length set by law** | 2 years for employees (rebuttable presumption) |
+
+## Are employee non-compete agreements enforceable in Georgia? {#employee-noncompetes}
+
+**Short answer.** Yes, when they are reasonable and the worker performs a covered job function. Under the Georgia Restrictive Covenants Act, a post-employment non-compete is permitted so long as it is reasonable in time, geographic area, and scope of prohibited activities [^q1-grca-13-8-53a-reasonable]. As the next question explains, the Act separately limits which employees can be bound by a post-employment non-compete.
+
+Georgia was historically a strict, covenant-hostile state, but a 2010 constitutional amendment and the Georgia Restrictive Covenants Act (the GRCA), O.C.G.A. §§ 13-8-50 to 13-8-59, replaced that regime with a reasonableness standard backed by statutory presumptions and judicial modification. The legislature said as much in the Act's findings.
+
+"The General Assembly finds that reasonable restrictive covenants contained in employment and commercial contracts serve the legitimate purpose of protecting legitimate business interests and creating an environment that is favorable to attracting commercial enterprises to Georgia and keeping existing businesses within the state."[^q1-grca-13-8-50-findings]
+
+The core enforcement rule appears in O.C.G.A. § 13-8-53(a). It permits a covenant that restricts competition if the restraint is reasonable in time, geographic area, and scope, and the rest of the Act supplies the presumptions and limits that give that reasonableness test concrete content.
+
+"Notwithstanding any other provision of this chapter, enforcement of contracts that restrict competition during the term of a restrictive covenant, so long as such restrictions are reasonable in time, geographic area, and scope of prohibited activities, shall be permitted."[^q1-grca-13-8-53a-reasonable]
+
+The party seeking to enforce a covenant carries the initial burden. O.C.G.A. § 13-8-55 requires the enforcing party to plead and prove a legitimate business interest, and only then does the burden shift to the worker.
+
+"The person seeking enforcement of a restrictive covenant shall plead and prove the existence of one or more legitimate business interests justifying the restrictive covenant. If a person seeking enforcement of the restrictive covenant establishes by prima-facie evidence that the restraint is in compliance with the provisions of Code Section 13-8-53, then any person opposing enforcement has the burden of establishing that the contractually specified restraint does not comply with such requirements or that such covenant is unreasonable."[^q1-grca-13-8-55-burden]
+
+## Which Georgia employees can be bound by a non-compete? {#covered-employees}
+
+**Short answer.** Only employees who perform certain higher-level functions. O.C.G.A. § 13-8-53(a) provides that a post-employment non-compete may not be enforced against an employee who does not customarily solicit customers, make sales, perform defined managerial duties, or qualify as a key employee or professional — and in *Blair v. Pantera Enterprises, Inc.* the Court of Appeals held that an hourly equipment operator did not meet the key-employee definition [^q2-grca-13-8-53a-categories][^q2-blair-key-employee].
+
+This employee-category gate is the most important structural limit in the GRCA, and national surveys often miss it. Even a covenant that is perfectly reasonable in time, area, and scope is unenforceable as a post-employment non-compete if the worker does not fall into one of the listed categories. Customer non-solicitation and confidentiality provisions, discussed below, are treated separately and are not subject to this gate.
+
+"However, enforcement of contracts that restrict competition after the term of employment, as distinguished from a customer nonsolicitation provision, as described in subsection (b) of this Code section, or a nondisclosure of confidential information provision, as described in subsection (e) of this Code section, shall not be permitted against any employee who does not, in the course of his or her employment: (1) Customarily and regularly solicit for the employer customers or prospective customers; (2) Customarily and regularly engage in making sales or obtaining orders or contracts for products or services to be performed by others; (3) Perform the following duties: (A) Have a primary duty of managing the enterprise in which the employee is employed or of a customarily recognized department or subdivision thereof; (B) Customarily and regularly direct the work of two or more other employees; and (C) Have the authority to hire or fire other employees or have particular weight given to suggestions and recommendations as to the hiring, firing, advancement, promotion, or any other change of status of other employees; or (4) Perform the duties of a key employee or of a professional."[^q2-grca-13-8-53a-categories]
+
+The *key employee* and *professional* categories are defined narrowly, and courts police them. In *Blair* — a decision issued as physical precedent only, so it is persuasive rather than binding — the employer tried to bind an hourly backhoe operator as a key employee, and the Court of Appeals rejected that characterization.
+
+"Thus, Blair is not a ‘key employee’ as that term is defined in OCGA § 13-8-51 (8). Consequently, the trial court erred in issuing injunctive relief to Pantera."[^q2-blair-key-employee]
+
+> [!NOTE]
+> **Practice note.**
+>
+> Confirm that the employee actually performs a covered function before relying on a non-compete. A reasonable covenant is still void as a post-employment non-compete against a worker who does not solicit, sell, manage, or qualify as a key employee or professional, as *Blair v. Pantera Enterprises* shows [^q2-grca-13-8-53a-categories][^q2-blair-key-employee].
+
+## How long can a Georgia non-compete last? {#duration}
+
+**Short answer.** It depends on the relationship, with rebuttable presumptions of two, three, or five years. O.C.G.A. § 13-8-57 presumes a restraint of two years or less reasonable against a former employee, three years or less against a distributor, dealer, franchisee, lessee, or licensee, and the longer of five years or the payout period reasonable against the seller or owner of a business [^q3-grca-13-8-57b-employee][^q3-grca-13-8-57c-other][^q3-grca-13-8-57d-sale].
+
+The durational presumptions are the clearest drafting safe harbors in the GRCA. For an ordinary former employee, the dividing line is two years, measured from the date the relationship ends.
+
+"a court shall presume to be reasonable in time any restraint two years or less in duration and shall presume to be unreasonable in time any restraint more than two years in duration, measured from the date of the termination of the business relationship."[^q3-grca-13-8-57b-employee]
+
+The Act gives more latitude outside the ordinary employment relationship. A covenant against a distributor, dealer, franchisee, lessee of real or personal property, or licensee gets a three-year presumption.
+
+"a court shall presume to be reasonable in time any restraint three years or less in duration and shall presume to be unreasonable in time any restraint more than three years in duration, measured from the date of termination of the business relationship."[^q3-grca-13-8-57c-other]
+
+A covenant tied to the sale or ownership of a business gets the most latitude of all — the longer of five years or the period over which the buyer is paying the seller.
+
+"a court shall presume to be reasonable in time any restraint the longer of five years or less in duration or equal to the period of time during which payments are being made to the owner or seller as a result of any sale referred to in this subsection and shall presume to be unreasonable in time any restraint more than the longer of five years in duration or the period of time during which payments are being made to the owner or seller as a result of any sale referred to in this subsection, measured from the date of termination or disposition of such interest."[^q3-grca-13-8-57d-sale]
+
+Because these presumptions are rebuttable, a covenant within the safe harbor can still be attacked as unreasonable in geography or scope, and a covenant beyond it can still be defended — but the burden flips with the time period.
+
+## Does a Georgia non-compete need an express geographic territory? {#geography}
+
+**Short answer.** No. In *North American Senior Benefits, LLC v. Wimmer*, decided September 4, 2024, the Supreme Court of Georgia held that O.C.G.A. § 13-8-53(a) does not require an express geographic term and reversed the Court of Appeals' contrary rule; geographic reasonableness is instead assessed in context [^q4-wimmer-no-express-term][^q4-grca-13-8-56-geography].
+
+For several years the Court of Appeals had read § 13-8-53(a) to require non-compete and employee-non-solicitation covenants to spell out an explicit geographic area. The Supreme Court rejected that reading in *Wimmer*.
+
+"The petitioner — a Georgia corporation seeking to enforce a restrictive covenant against two former employees — asks us to review the conclusion reached by the Court of Appeals that, to be deemed geographically reasonable under OCGA § 13-8-53 (a), a restrictive covenant must contain an express geographic term. In light of the statutory text and context of the GRCA, we conclude that the Court of Appeals erred, so we reverse and remand this case for further proceedings."[^q4-wimmer-no-express-term]
+
+The statute supports an implied-geography approach. O.C.G.A. § 13-8-56 supplies a presumption that the areas where the employer does business can be a reasonable territory, provided the total distance is reasonable, so the geographic inquiry turns on overall reasonableness rather than the presence of a magic-words territory clause.
+
+"In determining the reasonableness of a restrictive covenant that limits or restricts competition during or after the term of an employment or business or commercial relationship, the court shall make the following presumptions: (1) During the term of the relationship, a time period equal to or measured by duration of the parties' relationship is reasonable; provided, however, that the reasonableness of a time period after the term of an employment or business or commercial relationship shall be as provided for in Code Section 13-8-57; (2) A geographic territory which includes the areas in which the employer does business at any time during the parties' relationship, even if not known at the time of entry into the restrictive covenant, is reasonable provided that: (A) The total distance encompassed by the provisions of the covenant also is reasonable; (B) The agreement contains a list of particular competitors as prohibited employers for a limited period of time after the term of employment or a business or commercial relationship; or (C) Both subparagraphs (A) and (B) of this paragraph"[^q4-grca-13-8-56-geography]
+
+> [!CAUTION]
+> **Drafting note.**
+>
+> Do not assume a Georgia covenant fails for lack of an express territory, and do not assume one with a territory is automatically safe. After *Wimmer*, geographic scope is judged for overall reasonableness under O.C.G.A. § 13-8-56, so an unreasonably broad express territory is still vulnerable [^q4-wimmer-no-express-term][^q4-grca-13-8-56-geography].
+
+## Are customer non-solicitation covenants treated differently in Georgia? {#customer-nonsolicit}
+
+**Short answer.** Yes. O.C.G.A. § 13-8-53(b) lets an employer restrict solicitation of customers with whom the employee had material contact, and it expressly says no geographic term is required. The Act defines material contact narrowly, focusing on customers the employee actually dealt with or learned about [^q5-grca-13-8-53b-customer][^q5-grca-13-8-51-material-contact].
+
+Customer non-solicitation provisions sit outside the employee-category gate and outside the express-geography question entirely. The statute allows them without a territory, so long as they are tied to material-contact customers and competitive products or services.
+
+"an employee may agree in writing for the benefit of an employer to refrain, for a stated period of time following termination, from soliciting, or attempting to solicit, directly or by assisting others, any business from any of such employer's customers, including actively seeking prospective customers, with whom the employee had material contact during his or her employment for purposes of providing products or services that are competitive with those provided by the employer's business. No express reference to geographic area or the types of products or services considered to be competitive shall be required in order for the restraint to be enforceable."[^q5-grca-13-8-53b-customer]
+
+The leverage in a customer non-solicit is the definition of *material contact*. O.C.G.A. § 13-8-51 limits it to customers the employee dealt with, supervised, learned confidential information about, or earned compensation from in the two years before termination.
+
+"'Material contact' means the contact between an employee and each customer or potential customer: (A) With whom or which the employee dealt on behalf of the employer; (B) Whose dealings with the employer were coordinated or supervised by the employee; (C) About whom the employee obtained confidential information in the ordinary course of business as a result of such employee's association with the employer; or (D) Who receives products or services authorized by the employer, the sale or provision of which results or resulted in compensation, commissions, or earnings for the employee within two years prior to the date of the employee's termination."[^q5-grca-13-8-51-material-contact]
+
+> [!CAUTION]
+> **Drafting note.**
+>
+> Anchor a customer non-solicitation clause to material-contact customers rather than the employer's entire customer base. O.C.G.A. § 13-8-53(b) narrowly construes these covenants to customers the employee actually dealt with and to competitive products or services [^q5-grca-13-8-53b-customer][^q5-grca-13-8-51-material-contact].
+
+## Are employee non-recruitment and no-hire covenants governed by the GRCA? {#employee-nonsolicit}
+
+**Short answer.** Yes. In *Belt Power, LLC v. Reed*, the Court of Appeals held that the covenants at issue fell within the GRCA, and in *Wimmer* the Supreme Court applied § 13-8-53(a) to a two-year employee non-recruitment provision — so these covenants are analyzed under the Act and, after *Wimmer*, do not require an express geographic term [^q6-beltpower-grca][^q6-wimmer-nonrecruit].
+
+The statute carves out customer non-solicitation and confidentiality, but it does not separately address employee non-recruitment or no-hire covenants, so the courts have placed them inside the GRCA framework. *Belt Power* confirmed that a covenant restricting the recruitment of employees is analyzed under the Act rather than common law.
+
+"Upon a close reading of the entire statute, we conclude that the restrictive covenants at issue do fall within the ambit of the Act."[^q6-beltpower-grca]
+
+*Wimmer* itself involved a non-recruitment provision barring former employees from hiring or interfering with the employer's workforce for two years. The Supreme Court reviewed that provision under § 13-8-53(a) and held that it need not contain an express geographic term to be enforceable.
+
+"In light of the statutory text and context of the GRCA, we conclude that the Court of Appeals erred, so we reverse and remand this case for further proceedings."[^q6-wimmer-nonrecruit]
+
+> [!NOTE]
+> **Practice note.**
+>
+> Treat an employee non-recruitment or no-hire clause as a GRCA covenant, not a common-law one. *Belt Power v. Reed* placed these covenants within the Act, which means the reasonableness standard and modification limits apply [^q6-beltpower-grca][^q6-wimmer-nonrecruit].
+
+## Can a Georgia court blue-pencil an overbroad covenant? {#blue-pencil}
+
+**Short answer.** Yes, within a limit. O.C.G.A. § 13-8-53(d) makes a non-compliant covenant void but allows a court to modify it, so long as the modification does not make the covenant more restrictive for the employee than as originally drafted; O.C.G.A. § 13-8-54(b) directs courts to grant only the relief reasonably necessary [^q7-grca-13-8-53d-modify][^q7-grca-13-8-54b-relief].
+
+The GRCA replaced Georgia's old all-or-nothing rule with a modification power, but that power runs in only one direction — a court can narrow an overbroad covenant, never broaden it.
+
+"Any restrictive covenant not in compliance with the provisions of this article is unlawful and is void and unenforceable; provided, however, that a court may modify a covenant that is otherwise void and unenforceable so long as the modification does not render the covenant more restrictive with regard to the employee than as originally drafted by the parties."[^q7-grca-13-8-53d-modify]
+
+O.C.G.A. § 13-8-54 frames the interpretive posture. Courts construe covenants in favor of reasonable protection of legitimate interests, and when a restraint does not comply they may modify it to grant only the relief reasonably necessary.
+
+"A court shall construe a restrictive covenant to comport with the reasonable intent and expectations of the parties to the covenant and in favor of providing reasonable protection to all legitimate business interests established by the person seeking enforcement."[^q7-grca-13-8-54-construe]
+
+The modification power is discretionary, not automatic. In *Belt Power, LLC v. Reed*, the Court of Appeals held the trial court did not abuse its discretion in declining to blue-pencil the covenants at all, leaving them unenforceable as written [^q7-beltpower-modify]. For a clause-by-clause pass over a specific agreement against these drafting rules, the [Georgia non-compete review checklist](/checklists/non-compete/us/georgia) walks the full covenant suite item by item with each requirement's force level.
+
+"We nevertheless conclude that the trial court did not abuse its discretion in declining to apply the ‘blue pencil’ provision in the Act to modify the terms of the covenants."[^q7-beltpower-modify]
+
+> [!CAUTION]
+> **Drafting note.**
+>
+> Do not draft an overbroad covenant on the assumption a Georgia court will rewrite it into shape. Modification under O.C.G.A. § 13-8-53(d) is discretionary and can only narrow, not expand — and in *Belt Power v. Reed* the court declined to modify at all [^q7-grca-13-8-53d-modify][^q7-beltpower-modify].
+
+## Is continued employment sufficient consideration for a Georgia non-compete? {#consideration}
+
+**Short answer.** The GRCA does not codify a consideration rule. The Act sets the conditions for enforcing a covenant without addressing what consideration must support it, and Georgia practitioners generally treat continued at-will employment as sufficient — but no modern GRCA-era appellate decision squarely settles the point, so treat it as an area to monitor [^q8-grca-13-8-53a-consideration].
+
+A common in-house question is whether an existing at-will employee can be asked to sign a new covenant without a raise, bonus, or other new benefit. The GRCA itself is silent on consideration; § 13-8-53(a) speaks to reasonableness and the employee categories, not to what the employer must give in exchange.
+
+"Notwithstanding any other provision of this chapter, enforcement of contracts that restrict competition during the term of a restrictive covenant, so long as such restrictions are reasonable in time, geographic area, and scope of prohibited activities, shall be permitted."[^q8-grca-13-8-53a-consideration]
+
+Because the statute does not address consideration, the question is governed by Georgia contract principles, and practitioner commentary generally describes continued at-will employment as adequate consideration for a covenant signed during employment. That said, a definitive modern appellate decision applying that rule under the GRCA is harder to find, so the conservative course is to pair a mid-employment covenant with some additional consideration where practical.
+
+> [!NOTE]
+> **Practice note.**
+>
+> Do not assume continued employment alone will always suffice as consideration for a mid-employment Georgia covenant. The GRCA does not codify a consideration rule, and there is no clear modern GRCA-era appellate capstone, so where practical provide additional consideration and monitor for new case law [^q8-grca-13-8-53a-consideration].
+
+## Can an out-of-state choice-of-law clause avoid the GRCA? {#choice-of-law}
+
+**Short answer.** Generally no. In *Motorsports of Conyers, LLC v. Burbach*, the Supreme Court of Georgia held that Georgia law remains the touchstone, so a Georgia court must first determine whether a covenant complies with the GRCA; if the covenant is unreasonable under the Act, the court may not apply another state's law to enforce it [^q9-motorsports-touchstone][^q9-motorsports-mechanism].
+
+Employers with multi-state forms often insert a choice-of-law clause selecting a more permissive state. *Motorsports* makes clear that such a clause will not rescue a covenant that fails Georgia's public policy.
+
+"Having taken a fresh look, we conclude that Georgia law remains the touchstone for determining whether a given restrictive covenant is enforceable in our courts, even where the contract says another state's law applies."[^q9-motorsports-touchstone]
+
+The court set out a sequence: test the covenant against the GRCA first, and only honor the foreign law if the covenant is reasonable under Georgia law.
+
+"If the restrictive covenant is unreasonable under the GRCA, a Georgia court may not apply foreign law to enforce it."[^q9-motorsports-mechanism]
+
+> [!NOTE]
+> **Practice note.**
+>
+> Do not rely on a Delaware, Florida, or other out-of-state choice-of-law clause to enforce a covenant that would fail in Georgia. *Motorsports of Conyers v. Burbach* requires a Georgia court to test GRCA compliance first and bars foreign law when the covenant is unreasonable under the Act [^q9-motorsports-touchstone][^q9-motorsports-mechanism].
+
+## Does a Georgia non-compete toll or extend during breach or litigation? {#tolling-during-breach}
+
+**Short answer.** A court will not extend it, and a private tolling clause is on uncertain ground. In *Daneshgari v. Patriot Towing Services, LLC*, the Court of Appeals held that a trial court cannot extend a non-compete beyond its contractual expiration, even against a party violating an injunction, because Georgia courts have rejected the idea that equity lets a court extend the period of a non-compete. Whether a contractual clause that pauses and extends the restraint would fare better has not been squarely decided [^q10-daneshgari-no-extend][^q10-daneshgari-equity].
+
+Many covenants include a tolling clause stating that the restricted period pauses while the employee is in breach or while litigation is pending, so the employer gets a full period of compliance. Georgia law is hostile to judicial extension of the restraint past its stated end date.
+
+"On appeal, the defendants contend that the trial court erred in extending its injunction beyond the contractual expiration of the noncompete agreement. For the reasons set forth infra, we agree and reverse."[^q10-daneshgari-no-extend]
+
+The Court of Appeals agreed with the defendants and relied on Georgia precedent rejecting equitable extension of a covenant's duration.
+
+"But the Supreme Court of Georgia has rejected—at least implicitly—the idea that ‘equity permits a court to extend the period of a non-compete agreement.’"[^q10-daneshgari-equity]
+
+That said, the GRCA's broad remedies provision lets courts enforce a covenant by injunction during the agreement's term, and an employer can still pursue contempt for violating an injunction — it simply cannot stretch the covenant's duration past its contractual end. A contractual tolling clause that purports to extend the restraint beyond its stated term is therefore on uncertain ground, and counsel should not count on a court enforcing it [^q10-grca-13-8-58-remedies].
+
+"A court shall enforce a restrictive covenant by any appropriate and effective remedy available at law or equity, including, but not limited to, temporary and permanent injunctions."[^q10-grca-13-8-58-remedies]
+
+> [!NOTE]
+> **Practice note.**
+>
+> Do not rely on a tolling clause to extend a Georgia non-compete past its stated end date. *Daneshgari v. Patriot Towing Services* holds that a court cannot extend a covenant beyond its contractual expiration even against a party violating an injunction [^q10-daneshgari-no-extend][^q10-daneshgari-equity].
+
+## How do confidentiality and trade-secret protections compare to a Georgia non-compete? {#confidentiality-trade-secrets}
+
+**Short answer.** They are available and not subject to the non-compete limits. O.C.G.A. § 13-8-53(e) provides that confidentiality and trade-secret obligations are not limited in time or geography for as long as the information stays confidential or qualifies as a trade secret, and § 13-8-53(a) treats a nondisclosure-of-confidential-information provision as distinct from a post-employment competition restraint, so it sits outside the employee-category gate [^q11-grca-13-8-53e-confidentiality][^q11-grca-13-8-53a-carveout].
+
+For information-protection interests, a confidentiality covenant is often the better tool than a non-compete because it is not capped by the durational presumptions and does not depend on the employee's job category. The GRCA preserves indefinite confidentiality protection.
+
+"Nothing in this article shall be construed to limit the period of time for which a party may agree to maintain information as confidential or as a trade secret, or to limit the geographic area within which such information must be kept confidential or as a trade secret, for so long as the information or material remains confidential or a trade secret, as applicable."[^q11-grca-13-8-53e-confidentiality]
+
+The Act also recognizes trade secrets and valuable confidential information as legitimate business interests in their own right, which means a well-drafted confidentiality program can protect the same competitive concerns a non-compete addresses, while remaining enforceable against rank-and-file employees who could not be bound by a non-compete.
+
+> [!CAUTION]
+> **Drafting note.**
+>
+> Use confidentiality and trade-secret covenants for information-protection interests, especially against employees outside the non-compete categories. O.C.G.A. § 13-8-53(e) allows these obligations to run for as long as the information stays confidential, without the durational or category limits that apply to non-competes [^q11-grca-13-8-53e-confidentiality].
+
+## Are physician and other healthcare non-competes enforceable in Georgia? {#healthcare-physicians}
+
+**Short answer.** Yes, under the same GRCA rules. Georgia has no special statutory ban on physician non-competes; a physician is typically a *professional* under O.C.G.A. § 13-8-51, so a reasonable covenant is enforceable on the ordinary reasonableness terms. Because the legislature could change this, the area is worth monitoring [^q12-grca-13-8-51-professional][^q12-grca-13-8-53a-physician].
+
+Unlike a growing number of states, Georgia has not enacted a carve-out for physicians or other medical licensees. A physician generally qualifies as a *professional* under the Act, which is one of the employee categories that can be bound by a post-employment non-compete.
+
+"'Professional' means an employee who has as a primary duty the performance of work requiring knowledge of an advanced type in a field of science or learning customarily acquired by a prolonged course of specialized intellectual instruction or requiring invention, imagination, originality, or talent in a recognized field of artistic or creative endeavor."[^q12-grca-13-8-51-professional]
+
+A physician covenant is therefore enforceable on the same terms as any other professional's — reasonable in time, geographic area, and scope under § 13-8-53(a). Other healthcare workers are not automatically covered, however: a nurse, technician, or staff member can be bound by a post-employment non-compete only if he or she independently falls within one of the § 13-8-53(a) employee categories.
+
+"Notwithstanding any other provision of this chapter, enforcement of contracts that restrict competition during the term of a restrictive covenant, so long as such restrictions are reasonable in time, geographic area, and scope of prohibited activities, shall be permitted."[^q12-grca-13-8-53a-physician]
+
+> [!NOTE]
+> **Practice note.**
+>
+> Treat Georgia physician non-competes as enforceable under the ordinary GRCA reasonableness rules, but watch the legislature. Healthcare non-competes are a recurring subject of proposed legislation in Georgia, none of which has yet become law, so confirm the statute has not changed before relying on a physician covenant [^q12-grca-13-8-51-professional][^q12-grca-13-8-53a-physician].
+
+## Which agreements does the Georgia Restrictive Covenants Act cover? {#effective-date}
+
+**Short answer.** Only agreements entered on or after May 11, 2011. The GRCA applies to contracts entered into on and after its effective date and does not apply when a court determines the enforceability of a covenant entered before that date — those older covenants are still judged under Georgia's stricter pre-2011 common law [^q13-grca-effective-date].
+
+Georgia restrictive-covenant law is effectively two-track, divided by the date the covenant was signed. The Act expressly limits itself to agreements entered on or after its effective date.
+
+"This Act shall become effective upon its approval by the Governor or upon its becoming law without such approval and shall apply to contracts entered into on and after such date and shall not apply in actions determining the enforceability of restrictive covenants entered into before such date."[^q13-grca-effective-date]
+
+The Act was signed and took effect on May 11, 2011. A covenant signed before that date is governed by the older, far less forgiving common-law regime, under which Georgia courts strictly scrutinized employee covenants and would not blue-pencil an overbroad employment non-compete. The Act applies only between the listed contracting relationships — employers and employees, franchisors and franchisees, sellers and buyers of a business, and the others § 13-8-52 lists.
+
+"The provisions of this article shall be applicable only to contracts and agreements between or among: (1) Employers and employees; (2) Distributors and manufacturers; (3) Lessors and lessees; (4) Partnerships and partners; (5) Franchisors and franchisees; (6) Sellers and purchasers of a business or commercial enterprise; and (7) Two or more employers."[^q13-grca-13-8-52-application]
+
+> [!NOTE]
+> **Practice note.**
+>
+> Check the signing date before applying the GRCA. A covenant entered before May 11, 2011 is judged under Georgia's stricter pre-Act common law, where modification was unavailable for employment non-competes, so the modern reasonableness and blue-pencil rules do not apply to it [^q13-grca-effective-date][^q13-grca-13-8-52-application].
+
+[^about]: By Steven Obiajulu, J.D. Published by [openagreements.org](https://openagreements.org). Last reviewed 2026-06-03. License: CC BY 4.0. Steven Obiajulu, J.D. is admitted in New York, not Georgia. This article synthesizes Georgia primary law and is not legal advice from a Georgia-admitted attorney. This article is for informational purposes only and does not create an attorney-client relationship.
+
+[^q1-grca-13-8-53a-reasonable]: **O.C.G.A. § 13-8-53** — "Notwithstanding any other provision of this chapter, enforcement of contracts that restrict competition during the term of a restrictive covenant, so long as such restrictions are reasonable in time, geographic area, and scope of prohibited activities, shall be permitted." *O.C.G.A. § 13-8-53(a).* <https://www.legis.ga.gov/api/legislation/document/20112012/114248>
+
+[^q1-grca-13-8-50-findings]: **O.C.G.A. § 13-8-50** — "The General Assembly finds that reasonable restrictive covenants contained in employment and commercial contracts serve the legitimate purpose of protecting legitimate business interests and creating an environment that is favorable to attracting commercial enterprises to Georgia and keeping existing businesses within the state." *O.C.G.A. § 13-8-50.* <https://www.legis.ga.gov/api/legislation/document/20112012/114248>
+
+[^q1-grca-13-8-55-burden]: **O.C.G.A. § 13-8-55** — "The person seeking enforcement of a restrictive covenant shall plead and prove the existence of one or more legitimate business interests justifying the restrictive covenant. If a person seeking enforcement of the restrictive covenant establishes by prima-facie evidence that the restraint is in compliance with the provisions of Code Section 13-8-53, then any person opposing enforcement has the burden of establishing that the contractually specified restraint does not comply with such requirements or that such covenant is unreasonable." *O.C.G.A. § 13-8-55.* <https://www.legis.ga.gov/api/legislation/document/20112012/114248>
+
+[^q2-grca-13-8-53a-categories]: **O.C.G.A. § 13-8-53** — "However, enforcement of contracts that restrict competition after the term of employment, as distinguished from a customer nonsolicitation provision, as described in subsection (b) of this Code section, or a nondisclosure of confidential information provision, as described in subsection (e) of this Code section, shall not be permitted against any employee who does not, in the course of his or her employment: (1) Customarily and regularly solicit for the employer customers or prospective customers; (2) Customarily and regularly engage in making sales or obtaining orders or contracts for products or services to be performed by others; (3) Perform the following duties: (A) Have a primary duty of managing the enterprise in which the employee is employed or of a customarily recognized department or subdivision thereof; (B) Customarily and regularly direct the work of two or more other employees; and (C) Have the authority to hire or fire other employees or have particular weight given to suggestions and recommendations as to the hiring, firing, advancement, promotion, or any other change of status of other employees; or (4) Perform the duties of a key employee or of a professional." *O.C.G.A. § 13-8-53(a).* <https://www.legis.ga.gov/api/legislation/document/20112012/114248>
+
+[^q2-blair-key-employee]: **Blair v. Pantera Enterprises, Inc.** — "Thus, Blair is not a ‘key employee’ as that term is defined in OCGA § 13-8-51 (8). Consequently, the trial court erred in issuing injunctive relief to Pantera." *Blair v. Pantera Enterprises, Inc., 349 Ga. App. 846 (2019) (physical precedent only).* <https://www.courtlistener.com/opinion/4601931/blair-v-pantera-enterprises-inc/#:~:text=Thus%2C%20Blair%20is%20not%20a,issuing%20injunctive%20relief%20to%20Pantera.>
+
+[^q3-grca-13-8-57b-employee]: **O.C.G.A. § 13-8-57** — "a court shall presume to be reasonable in time any restraint two years or less in duration and shall presume to be unreasonable in time any restraint more than two years in duration, measured from the date of the termination of the business relationship." *O.C.G.A. § 13-8-57(b).* <https://www.legis.ga.gov/api/legislation/document/20112012/114248>
+
+[^q3-grca-13-8-57c-other]: **O.C.G.A. § 13-8-57** — "a court shall presume to be reasonable in time any restraint three years or less in duration and shall presume to be unreasonable in time any restraint more than three years in duration, measured from the date of termination of the business relationship." *O.C.G.A. § 13-8-57(c).* <https://www.legis.ga.gov/api/legislation/document/20112012/114248>
+
+[^q3-grca-13-8-57d-sale]: **O.C.G.A. § 13-8-57** — "a court shall presume to be reasonable in time any restraint the longer of five years or less in duration or equal to the period of time during which payments are being made to the owner or seller as a result of any sale referred to in this subsection and shall presume to be unreasonable in time any restraint more than the longer of five years in duration or the period of time during which payments are being made to the owner or seller as a result of any sale referred to in this subsection, measured from the date of termination or disposition of such interest." *O.C.G.A. § 13-8-57(d).* <https://www.legis.ga.gov/api/legislation/document/20112012/114248>
+
+[^q4-wimmer-no-express-term]: **North American Senior Benefits, LLC v. Wimmer** — "The petitioner — a Georgia corporation seeking to enforce a restrictive covenant against two former employees — asks us to review the conclusion reached by the Court of Appeals that, to be deemed geographically reasonable under OCGA § 13-8-53 (a), a restrictive covenant must contain an express geographic term. In light of the statutory text and context of the GRCA, we conclude that the Court of Appeals erred, so we reverse and remand this case for further proceedings." *North American Senior Benefits, LLC v. Wimmer, 319 Ga. 641 (2024).* <https://www.courtlistener.com/opinion/10680273/north-american-senior-benefits-llc-v-wimmer/#:~:text=The%20petitioner%20%E2%80%94%20a%20Georgia,this%20case%20for%20further%20proceedings.>
+
+[^q4-grca-13-8-56-geography]: **O.C.G.A. § 13-8-56** — "In determining the reasonableness of a restrictive covenant that limits or restricts competition during or after the term of an employment or business or commercial relationship, the court shall make the following presumptions: (1) During the term of the relationship, a time period equal to or measured by duration of the parties' relationship is reasonable; provided, however, that the reasonableness of a time period after the term of an employment or business or commercial relationship shall be as provided for in Code Section 13-8-57; (2) A geographic territory which includes the areas in which the employer does business at any time during the parties' relationship, even if not known at the time of entry into the restrictive covenant, is reasonable provided that: (A) The total distance encompassed by the provisions of the covenant also is reasonable; (B) The agreement contains a list of particular competitors as prohibited employers for a limited period of time after the term of employment or a business or commercial relationship; or (C) Both subparagraphs (A) and (B) of this paragraph" *O.C.G.A. § 13-8-56(2).* <https://www.legis.ga.gov/api/legislation/document/20112012/114248>
+
+[^q5-grca-13-8-53b-customer]: **O.C.G.A. § 13-8-53** — "an employee may agree in writing for the benefit of an employer to refrain, for a stated period of time following termination, from soliciting, or attempting to solicit, directly or by assisting others, any business from any of such employer's customers, including actively seeking prospective customers, with whom the employee had material contact during his or her employment for purposes of providing products or services that are competitive with those provided by the employer's business. No express reference to geographic area or the types of products or services considered to be competitive shall be required in order for the restraint to be enforceable." *O.C.G.A. § 13-8-53(b).* <https://www.legis.ga.gov/api/legislation/document/20112012/114248>
+
+[^q5-grca-13-8-51-material-contact]: **O.C.G.A. § 13-8-51** — "'Material contact' means the contact between an employee and each customer or potential customer: (A) With whom or which the employee dealt on behalf of the employer; (B) Whose dealings with the employer were coordinated or supervised by the employee; (C) About whom the employee obtained confidential information in the ordinary course of business as a result of such employee's association with the employer; or (D) Who receives products or services authorized by the employer, the sale or provision of which results or resulted in compensation, commissions, or earnings for the employee within two years prior to the date of the employee's termination." *O.C.G.A. § 13-8-51(10).* <https://www.legis.ga.gov/api/legislation/document/20112012/114248>
+
+[^q6-beltpower-grca]: **Belt Power, LLC v. Reed** — "Upon a close reading of the entire statute, we conclude that the restrictive covenants at issue do fall within the ambit of the Act." *Belt Power, LLC v. Reed, 354 Ga. App. 289 (2020).* <https://www.courtlistener.com/opinion/4735721/belt-power-llc-v-steve-reed/#:~:text=Upon%20a%20close%20reading%20of,the%20ambit%20of%20the%20Act.>
+
+[^q6-wimmer-nonrecruit]: **North American Senior Benefits, LLC v. Wimmer** — "In light of the statutory text and context of the GRCA, we conclude that the Court of Appeals erred, so we reverse and remand this case for further proceedings." *North American Senior Benefits, LLC v. Wimmer, 319 Ga. 641 (2024).* <https://www.courtlistener.com/opinion/10680273/north-american-senior-benefits-llc-v-wimmer/#:~:text=In%20light%20of%20the%20statutory,this%20case%20for%20further%20proceedings.>
+
+[^q7-grca-13-8-53d-modify]: **O.C.G.A. § 13-8-53** — "Any restrictive covenant not in compliance with the provisions of this article is unlawful and is void and unenforceable; provided, however, that a court may modify a covenant that is otherwise void and unenforceable so long as the modification does not render the covenant more restrictive with regard to the employee than as originally drafted by the parties." *O.C.G.A. § 13-8-53(d).* <https://www.legis.ga.gov/api/legislation/document/20112012/114248>
+
+[^q7-grca-13-8-54b-relief]: **O.C.G.A. § 13-8-54** — "In any action concerning enforcement of a restrictive covenant, a court shall not enforce a restrictive covenant unless it is in compliance with the provisions of Code Section 13-8-53; provided, however, that if a court finds that a contractually specified restraint does not comply with the provisions of Code Section 13-8-53, then the court may modify the restraint provision and grant only the relief reasonably necessary to protect such interest or interests and to achieve the original intent of the contracting parties to the extent possible." *O.C.G.A. § 13-8-54(b).* <https://www.legis.ga.gov/api/legislation/document/20112012/114248>
+
+[^q7-grca-13-8-54-construe]: **O.C.G.A. § 13-8-54** — "A court shall construe a restrictive covenant to comport with the reasonable intent and expectations of the parties to the covenant and in favor of providing reasonable protection to all legitimate business interests established by the person seeking enforcement." *O.C.G.A. § 13-8-54(a).* <https://www.legis.ga.gov/api/legislation/document/20112012/114248>
+
+[^q7-beltpower-modify]: **Belt Power, LLC v. Reed** — "We nevertheless conclude that the trial court did not abuse its discretion in declining to apply the ‘blue pencil’ provision in the Act to modify the terms of the covenants." *Belt Power, LLC v. Reed, 354 Ga. App. 289 (2020).* <https://www.courtlistener.com/opinion/4735721/belt-power-llc-v-steve-reed/#:~:text=We%20nevertheless%20conclude%20that%20the,the%20terms%20of%20the%20covenants.>
+
+[^q8-grca-13-8-53a-consideration]: **O.C.G.A. § 13-8-53** — "Notwithstanding any other provision of this chapter, enforcement of contracts that restrict competition during the term of a restrictive covenant, so long as such restrictions are reasonable in time, geographic area, and scope of prohibited activities, shall be permitted." *O.C.G.A. § 13-8-53(a).* <https://www.legis.ga.gov/api/legislation/document/20112012/114248>
+
+[^q9-motorsports-touchstone]: **Motorsports of Conyers, LLC v. Burbach** — "Having taken a fresh look, we conclude that Georgia law remains the touchstone for determining whether a given restrictive covenant is enforceable in our courts, even where the contract says another state's law applies." *Motorsports of Conyers, LLC v. Burbach, 317 Ga. 206 (2023).* <https://www.courtlistener.com/opinion/10680038/motorsports-of-conyers-llc-v-burbach/#:~:text=Having%20taken%20a%20fresh%20look%2C,says%20another%20state's%20law%20applies.>
+
+[^q9-motorsports-mechanism]: **Motorsports of Conyers, LLC v. Burbach** — "If the restrictive covenant is unreasonable under the GRCA, a Georgia court may not apply foreign law to enforce it." *Motorsports of Conyers, LLC v. Burbach, 317 Ga. 206 (2023).* <https://www.courtlistener.com/opinion/10680038/motorsports-of-conyers-llc-v-burbach/#:~:text=If%20the%20restrictive%20covenant%20is,foreign%20law%20to%20enforce%20it.>
+
+[^q10-daneshgari-no-extend]: **Daneshgari v. Patriot Towing Services, LLC** — "On appeal, the defendants contend that the trial court erred in extending its injunction beyond the contractual expiration of the noncompete agreement. For the reasons set forth infra, we agree and reverse." *Daneshgari v. Patriot Towing Services, LLC, 361 Ga. App. 555 (2021).* <https://www.courtlistener.com/opinion/5295364/khosrow-daneshgari-v-patriot-towing-services-llc/#:~:text=On%20appeal%2C%20the%20defendants%20contend,infra%2C%20we%20agree%20and%20reverse.>
+
+[^q10-daneshgari-equity]: **Daneshgari v. Patriot Towing Services, LLC** — "But the Supreme Court of Georgia has rejected—at least implicitly—the idea that ‘equity permits a court to extend the period of a non-compete agreement.’" *Daneshgari v. Patriot Towing Services, LLC, 361 Ga. App. 555 (2021).* <https://www.courtlistener.com/opinion/5295364/khosrow-daneshgari-v-patriot-towing-services-llc/#:~:text=But%20the%20Supreme%20Court%20of,period%20of%20a%20non%2Dcompete%20agreement.%E2%80%9D>
+
+[^q10-grca-13-8-58-remedies]: **O.C.G.A. § 13-8-58** — "A court shall enforce a restrictive covenant by any appropriate and effective remedy available at law or equity, including, but not limited to, temporary and permanent injunctions." *O.C.G.A. § 13-8-58(c).* <https://www.legis.ga.gov/api/legislation/document/20112012/114248>
+
+[^q11-grca-13-8-53e-confidentiality]: **O.C.G.A. § 13-8-53** — "Nothing in this article shall be construed to limit the period of time for which a party may agree to maintain information as confidential or as a trade secret, or to limit the geographic area within which such information must be kept confidential or as a trade secret, for so long as the information or material remains confidential or a trade secret, as applicable." *O.C.G.A. § 13-8-53(e).* <https://www.legis.ga.gov/api/legislation/document/20112012/114248>
+
+[^q11-grca-13-8-53a-carveout]: **O.C.G.A. § 13-8-53** — "However, enforcement of contracts that restrict competition after the term of employment, as distinguished from a customer nonsolicitation provision, as described in subsection (b) of this Code section, or a nondisclosure of confidential information provision, as described in subsection (e) of this Code section, shall not be permitted against any employee who does not, in the course of his or her employment:" *O.C.G.A. § 13-8-53(a).* <https://www.legis.ga.gov/api/legislation/document/20112012/114248>
+
+[^q12-grca-13-8-51-professional]: **O.C.G.A. § 13-8-51** — "'Professional' means an employee who has as a primary duty the performance of work requiring knowledge of an advanced type in a field of science or learning customarily acquired by a prolonged course of specialized intellectual instruction or requiring invention, imagination, originality, or talent in a recognized field of artistic or creative endeavor." *O.C.G.A. § 13-8-51(14).* <https://www.legis.ga.gov/api/legislation/document/20112012/114248>
+
+[^q12-grca-13-8-53a-physician]: **O.C.G.A. § 13-8-53** — "Notwithstanding any other provision of this chapter, enforcement of contracts that restrict competition during the term of a restrictive covenant, so long as such restrictions are reasonable in time, geographic area, and scope of prohibited activities, shall be permitted." *O.C.G.A. § 13-8-53(a).* <https://www.legis.ga.gov/api/legislation/document/20112012/114248>
+
+[^q13-grca-effective-date]: **2011 Ga. HB 30, § 5 (O.C.G.A. § 13-8-50 et seq.)** — "This Act shall become effective upon its approval by the Governor or upon its becoming law without such approval and shall apply to contracts entered into on and after such date and shall not apply in actions determining the enforceability of restrictive covenants entered into before such date." *2011 Ga. HB 30, § 5 (eff. May 11, 2011).* <https://www.legis.ga.gov/api/legislation/document/20112012/114248>
+
+[^q13-grca-13-8-52-application]: **O.C.G.A. § 13-8-52** — "The provisions of this article shall be applicable only to contracts and agreements between or among: (1) Employers and employees; (2) Distributors and manufacturers; (3) Lessors and lessees; (4) Partnerships and partners; (5) Franchisors and franchisees; (6) Sellers and purchasers of a business or commercial enterprise; and (7) Two or more employers." *O.C.G.A. § 13-8-52(a).* <https://www.legis.ga.gov/api/legislation/document/20112012/114248>

package/skills/legal-explainers/non-compete-contract-explainer/content/guam.md

@@ -0,0 +1,180 @@
+---
+jurisdiction: "Guam"
+slug: guam
+countryCode: US
+snapshotAsOf: "2026-06-19"
+lastReviewed: "2026-06-03"
+canonicalUrl: https://openagreements.org/practice-guides/non-compete/us/guam
+license: CC BY 4.0
+stale: false
+---
+
+> [!IMPORTANT]
+> **Informational only — not legal advice.** This is a snapshot of an OpenAgreements practice note,
+> provided for general information. It is not legal advice, does not create an attorney-client
+> relationship, and is not a substitute for a licensed attorney in the relevant jurisdiction.
+> Laws change; verify against the canonical version before relying on it.
+>
+> **Canonical:** https://openagreements.org/practice-guides/non-compete/us/guam · **Snapshot as of:** 2026-06-19 · License: CC BY 4.0 · © openagreements.org
+
+# Non-Competes in Guam[^about]
+
+Guam voids employee non-compete agreements by statute — 18 GCA § 88105 derives from former California Civil Code § 1673 and is virtually identical to California's Business and Professions Code § 16600 — and the Supreme Court of Guam reads it as a per-se ban, leaving only narrow sale-of-business and partnership-dissolution exceptions.
+
+
+## At a glance
+
+| Question | Guam |
+| --- | --- |
+| **Are non-competes enforceable?** | Banned |
+| **Bottom line** | Guam voids employee non-competes by statute — 18 GCA § 88105, a transplant of California's restraint-of-trade rule that the Supreme Court of Guam reads as a per-se ban — leaving only narrow sale-of-business and partnership-dissolution exceptions. |
+| **Main law or case** | 18 GCA § 88105; Island Eye Ctr., Inc. v. Lombard, 2020 Guam 32 |
+| **Main exceptions** | Sale of business good will (§ 88106); partnership dissolution (§ 88107) |
+| **Can a court narrow it?** | No |
+| **Applies to contractors?** | Unclear |
+| **Restriction extended during a breach?** | Not addressed |
+| **Maximum length set by law** | Not applicable (employee covenant void regardless of duration) |
+
+## Are employee non-compete agreements enforceable in Guam? {#employee-noncompetes}
+
+**Short answer.** No. Guam voids employee non-compete agreements by statute. Title 18 of the Guam Code Annotated, section 88105, makes every contract that restrains someone from exercising a lawful profession, trade, or business void to that extent, except for two narrow statutory exceptions — and in *Island Eye Center, Inc. v. Lombard* the Supreme Court of Guam read that language as a per-se ban [^stat-88105][^ie-void-holding].
+
+Guam's restraint-of-trade statute is not the product of local drafting — it is California law transplanted. Section 88105 descends from the former California Civil Code section 1673, since recodified as the heavily litigated Business and Professions Code section 16600, and the *Island Eye* court said so in the first case to construe the provision [^ie-first-time][^ie-derived].
+
+"Our statute is derived from California Civil Code section 1673, since replaced by California Business and Professions Code section 16600."[^ie-derived]
+
+Because the statutes are nearly identical, the court treats California's interpretation as persuasive and adopted its strict employee-mobility reading for the non-compete before it. That means Guam, like California, does not weigh a covenant's duration or geography the way a reasonableness state does. A clause that restrains a former employee from competing is simply outside the statute and void — the court reads section 88105 as an expression of public policy favoring employee mobility [^ie-policy].
+
+"Therefore, we hold that section 88105 evidences public policy for employee mobility and every citizen's right to pursue lawful employment or enterprise of his or her choice."[^ie-policy]
+
+Applying that rule, the court struck the non-compete in *Island Eye*, which barred an ophthalmologist from practicing for 30 months across Guam and the Mariana Islands, as void rather than narrowing it to something enforceable [^ie-void-holding].
+
+"These post-employment terms are undoubtedly a restraint of trade in violation of 18 GCA § 88105 and are to that extent void."[^ie-void-holding]
+
+This is not a new development. Decades earlier, the Ninth Circuit applied the same statute in *Shelton v. Guam Service Games* and voided a Guam-wide covenant, holding that a positive legislative declaration overrode any common-law reasonableness argument [^shelton-void].
+
+"Since this agreement attempted to make the prohibition and restraint complete within the Territory of Guam, it is to that extent void."[^shelton-void]
+
+> [!NOTE]
+> **Practice note.**
+>
+> Do not paper a Guam employee with an out-of-state non-compete form and assume a court will blue-pencil it down to something enforceable. The Supreme Court of Guam voided the non-compete in *Island Eye* outright, and it expressly left open whether blue-penciling an overbroad covenant is even permissible — so reformation is no safe harbor. The only reliable paths to a valid covenant are the narrow sale-of-business and partnership exceptions discussed below [^stat-88105][^ie-void-holding].
+
+## Are customer and employee non-solicitation clauses enforceable in Guam? {#non-solicitation}
+
+**Short answer.** Neither sits on firm ground, and a customer non-solicitation clause likely shares the non-compete's fate. No Guam decision squarely rules on a customer non-solicitation clause, but because *Island Eye* adopted California's section 16600 framework — under which a covenant that forecloses a former employee's ability to compete for business is an impermissible restraint — a customer non-solicit likely carries the same void risk. For clauses barring the solicitation of a former employer's *staff*, the Supreme Court of Guam expressly left the question of facial validity open in *Island Eye* [^q2-ie-postemp][^q2-ie-facial].
+
+Guam took its restraint-of-trade rule from California, where post-employment covenants that foreclose a worker's ability to compete are impermissible restraints regardless of how they are labeled — including the former-client service restriction the court invalidated in *Edwards*, the decision *Island Eye* adopted. *Island Eye* itself distinguished employee anti-raiding clauses from client non-solicits and did not separately rule on a customer non-solicitation clause, so the customer-restriction conclusion is a prediction from the adopted framework rather than a Guam holding [^q2-ie-postemp].
+
+"California courts interpret post-employment covenants not to compete as impermissible restraints of trade which violate section 16600."[^q2-ie-postemp]
+
+Employee *anti-raiding* clauses — barring a departing worker from soliciting the employer's remaining staff — are the open question. In *Island Eye*, the employer conceded that such clauses are typically invalidated under California law, and the court resolved the dispute without deciding whether they facially violate section 88105 [^q2-ie-concede][^q2-ie-facial].
+
+"Because of Island Eye's concession, the parties' arguments on appeal are limited to whether non-solicitation clauses facially violate 18 GCA § 88105."[^q2-ie-facial]
+
+> [!NOTE]
+> **Practice note.**
+>
+> Treat a customer non-solicitation clause in a Guam employment agreement as carrying the same void risk as a non-compete, and recognize that an employee anti-raiding clause rests on unsettled ground after *Island Eye* — the court declined to rule on its facial validity, and the employer there conceded California voids such clauses. Protect customer relationships and workforce stability through a properly scoped trade-secret and confidentiality program instead [^q2-ie-postemp][^q2-ie-concede].
+
+## Are non-competes tied to the sale of a business enforceable in Guam? {#sale-of-business}
+
+**Short answer.** Yes, within a narrow statutory exception. Section 88106 lets a person who sells the good will of a business agree not to carry on a similar business within a *specified district, city, or a part thereof*, so long as the buyer continues a like business there — but courts read the geographic limit strictly [^stat-88106][^shelton-goodwill].
+
+The sale-of-business exception exists so a buyer can protect the good will it pays for; without it, a seller could reopen next door and take back the customer base just sold. But the covenant must be tied to a genuine sale of good will and confined to a specified district, city, or part of one [^stat-88106].
+
+"One who sells the good will of a business may agree with the buyer to refrain from carrying on a similar business within a specified district, city, or a part thereof, so long as the buyer, or any person deriving title to the good will from him, carries on a like business therein."[^stat-88106]
+
+That geographic limit has teeth. In *Shelton v. Guam Service Games*, the Ninth Circuit refused to fit a Territory-wide covenant within the good-will exception, reasoning that a restraint covering the entire Territory of Guam is too broad to be the *specified district, city, or part* the statute allows [^shelton-goodwill].
+
+"By no theory could it include the entire Territory of Guam or any major portion thereof."[^shelton-goodwill]
+
+> [!CAUTION]
+> **Drafting note.**
+>
+> Tie a Guam sale-of-business covenant to the good will actually sold and confine it to a specified district, city, or part of one — not the whole island. A covenant scoped to the entire Territory of Guam falls outside section 88106 and, under *Shelton*, leaves section 88105 to void it [^stat-88106][^shelton-goodwill].
+
+## Can partners agree not to compete on dissolution of a Guam partnership? {#partnership-dissolution}
+
+**Short answer.** Yes, within the second statutory exception. Section 88107 lets partners, on or in anticipation of dissolving a partnership, agree not to carry on a similar business within the same city or town where the partnership did business, or a specified part of it [^stat-88107].
+
+This is the partnership analogue to the sale-of-business exception, and it is drafted just as narrowly: the permissible restraint is bounded to the same city or town — or a specified part of it — where the partnership transacted business [^stat-88107].
+
+"Partners may, upon or in anticipation of a dissolution of a partnership, agree that none of them will carry on a similar business within the same city or town where the partnership business has been transacted, or within a specified part thereof."[^stat-88107]
+
+> [!CAUTION]
+> **Drafting note.**
+>
+> Scope a partnership non-compete to the same city or town — or a specified part of it — where the partnership actually did business, and tie it to dissolution. A clause reaching beyond that geography, or imposed outside the dissolution context, falls outside section 88107 and is exposed to the section 88105 ban [^stat-88107][^q4-stat-88105].
+
+## Can a liquidated-damages or penalty clause back up a Guam covenant? {#liquidated-damages}
+
+**Short answer.** Generally no. Guam's contract statute voids a clause that fixes damages for breach in advance, except where actual damages would be impracticable or extremely difficult to fix — so a penalty bolted onto a covenant cannot do work the covenant itself cannot [^stat-88103][^stat-88104].
+
+Section 88103 sets the default rule: a contract that fixes the amount of damages in anticipation of a breach is void to that extent [^stat-88103].
+
+"Every contract by which the amount of damage to be paid, or other compensation to be made, for a breach of an obligation, is determined in anticipation thereof, is to that extent void, except as expressly provided in the next section."[^stat-88103]
+
+The lone exception, section 88104, permits a genuine liquidated-damages estimate only where actual damages would be impracticable or extremely difficult to fix [^stat-88104].
+
+"The parties to a contract may agree therein on an amount which shall be presumed to be the amount of damage sustained by a breach thereof; when, from the nature of the case, it would be impracticable or extremely difficult to fix the actual damage."[^stat-88104]
+
+> [!CAUTION]
+> **Drafting note.**
+>
+> Do not try to rescue a Guam non-compete with a liquidated-damages or penalty clause. The covenant itself is void under section 88105, and section 88103 independently voids a damages-fixing clause unless it meets the narrow section 88104 standard for situations where actual damages are impracticable to calculate [^stat-88103][^stat-88104].
+
+## What can a Guam employer protect instead of a non-compete? {#trade-secrets}
+
+**Short answer.** Trade secrets and narrowly drawn confidentiality. Guam has not adopted the Uniform Trade Secrets Act, so in *Island Eye* the Supreme Court of Guam borrowed the trade-secret definition from the territory's criminal code — 9 GCA § 43.10(f) — to govern civil misappropriation claims; that protection guards genuine secrets without restraining the employee's right to compete [^q6-ie-tradesecret].
+
+Because the *Island Eye* employer had no statutory trade-secret regime to point to, the court had to decide what definition applies to a civil claim. It adopted the criminal-code definition as a matter of first impression [^q6-ie-tradesecret].
+
+"Therefore, we hold that the definition of trade secrets in 9 GCA § 43.10(f) is the definition of trade secrets for civil trade-secret-misappropriation claims."[^q6-ie-tradesecret]
+
+A confidentiality or trade-secret program protects the *information* rather than the employment relationship, which is why it is the durable tool a Guam employer has after section 88105 takes a non-compete off the table. The discipline it requires is precision: a confidentiality clause cannot be written so broadly that it functions as a back-door non-compete barring the employee from the field, because that would be the very restraint section 88105 voids.
+
+The court drew that line itself. *Island Eye* rejected the *inevitable disclosure* doctrine — the theory that a departing employee will inevitably use trade secrets in a new job — precisely because it would convert trade-secret protection into a de facto covenant not to compete, and stressed that such protection is a shield rather than a sword [^q6-ie-shield].
+
+"Trade-secret protection should be a shield, not a sword used by employers to retain its employees by threat of rendering them substantially unemployable in their field of experience or prevent workers from pursuing their livelihoods when they leave their current positions."[^q6-ie-shield]
+
+> [!CAUTION]
+> **Drafting note.**
+>
+> Do not define *confidential information* so broadly that it sweeps in the employee's general skills, knowledge, and industry experience — a confidentiality clause that effectively prevents the worker from practicing their profession is a non-compete in substance and void under section 88105. Tie confidentiality to genuine secrets that meet the 9 GCA § 43.10(f) definition the Supreme Court of Guam adopted, and remember that hiring a former competitor's at-will staff is not itself misappropriation absent an identifiable trade secret [^q6-ie-tradesecret][^q6-ie-shield].
+
+[^about]: By Steven Obiajulu, J.D. Published by [openagreements.org](https://openagreements.org). Last reviewed 2026-06-03. License: CC BY 4.0. Steven Obiajulu, J.D. is admitted in New York, not Guam. This article synthesizes Guam primary law and is not legal advice from a Guam-admitted attorney. This article is for informational purposes only and does not create an attorney-client relationship.
+
+[^stat-88105]: **18 GCA § 88105 — Contracts in Restraint of Trade** — "Every contract, by which anyone is restrained from exercising a lawful profession, trade, or business of any kind, otherwise than is provided in the next two sections, is to that extent void." *18 GCA § 88105.* <https://col.guamcourts.gov/sites/default/files/18gc088.pdf>
+
+[^ie-void-holding]: **Island Eye Center, Inc. v. Lombard** — "These post-employment terms are undoubtedly a restraint of trade in violation of 18 GCA § 88105 and are to that extent void." *Island Eye Ctr., Inc. v. Lombard, 2020 Guam 32.* <https://case-law.vlex.com/vid/island-eye-ctr-v-1039283384>
+
+[^ie-first-time]: **Island Eye Center, Inc. v. Lombard** — "This is the first time we have been asked to interpret our restraint-of-trade provision." *Island Eye Ctr., Inc. v. Lombard, 2020 Guam 32.* <https://case-law.vlex.com/vid/island-eye-ctr-v-1039283384>
+
+[^ie-derived]: **Island Eye Center, Inc. v. Lombard** — "Our statute is derived from California Civil Code section 1673, since replaced by California Business and Professions Code section 16600." *Island Eye Ctr., Inc. v. Lombard, 2020 Guam 32.* <https://case-law.vlex.com/vid/island-eye-ctr-v-1039283384>
+
+[^ie-policy]: **Island Eye Center, Inc. v. Lombard** — "Therefore, we hold that section 88105 evidences public policy for employee mobility and every citizen's right to pursue lawful employment or enterprise of his or her choice." *Island Eye Ctr., Inc. v. Lombard, 2020 Guam 32.* <https://case-law.vlex.com/vid/island-eye-ctr-v-1039283384>
+
+[^shelton-void]: **Shelton v. Guam Service Games** — "Since this agreement attempted to make the prohibition and restraint complete within the Territory of Guam, it is to that extent void." *Shelton v. Guam Service Games, 239 F.2d 902 (9th Cir. 1956).* <https://www.courtlistener.com/opinion/241093/austin-j-shelton-v-guam-service-games-a-copartnership/#:~:text=Since%20this%20agreement%20attempted%20to,is%20to%20that%20extent%20void.>
+
+[^q2-ie-postemp]: **Island Eye Center, Inc. v. Lombard** — "California courts interpret post-employment covenants not to compete as impermissible restraints of trade which violate section 16600." *Island Eye Ctr., Inc. v. Lombard, 2020 Guam 32.* <https://case-law.vlex.com/vid/island-eye-ctr-v-1039283384>
+
+[^q2-ie-facial]: **Island Eye Center, Inc. v. Lombard** — "Because of Island Eye's concession, the parties' arguments on appeal are limited to whether non-solicitation clauses facially violate 18 GCA § 88105." *Island Eye Ctr., Inc. v. Lombard, 2020 Guam 32.* <https://case-law.vlex.com/vid/island-eye-ctr-v-1039283384>
+
+[^q2-ie-concede]: **Island Eye Center, Inc. v. Lombard** — "Island Eye concedes that employee non-solicitation clauses are typically invalidated under California law as unlawful restraints of trade." *Island Eye Ctr., Inc. v. Lombard, 2020 Guam 32.* <https://case-law.vlex.com/vid/island-eye-ctr-v-1039283384>
+
+[^stat-88106]: **18 GCA § 88106 — Exception: Sale of Good Will** — "One who sells the good will of a business may agree with the buyer to refrain from carrying on a similar business within a specified district, city, or a part thereof, so long as the buyer, or any person deriving title to the good will from him, carries on a like business therein." *18 GCA § 88106.* <https://col.guamcourts.gov/sites/default/files/18gc088.pdf>
+
+[^shelton-goodwill]: **Shelton v. Guam Service Games** — "By no theory could it include the entire Territory of Guam or any major portion thereof." *Shelton v. Guam Service Games, 239 F.2d 902 (9th Cir. 1956).* <https://www.courtlistener.com/opinion/241093/austin-j-shelton-v-guam-service-games-a-copartnership/#:~:text=By%20no%20theory%20could%20it,or%20any%20major%20portion%20thereof.>
+
+[^stat-88107]: **18 GCA § 88107 — Exception: Partnership Agreement** — "Partners may, upon or in anticipation of a dissolution of a partnership, agree that none of them will carry on a similar business within the same city or town where the partnership business has been transacted, or within a specified part thereof." *18 GCA § 88107.* <https://col.guamcourts.gov/sites/default/files/18gc088.pdf>
+
+[^q4-stat-88105]: **18 GCA § 88105 — Contracts in Restraint of Trade** — "Every contract, by which anyone is restrained from exercising a lawful profession, trade, or business of any kind, otherwise than is provided in the next two sections, is to that extent void." *18 GCA § 88105.* <https://col.guamcourts.gov/sites/default/files/18gc088.pdf>
+
+[^stat-88103]: **18 GCA § 88103 — Contract Fixing Damages** — "Every contract by which the amount of damage to be paid, or other compensation to be made, for a breach of an obligation, is determined in anticipation thereof, is to that extent void, except as expressly provided in the next section." *18 GCA § 88103.* <https://col.guamcourts.gov/sites/default/files/18gc088.pdf>
+
+[^stat-88104]: **18 GCA § 88104 — Exceptions** — "The parties to a contract may agree therein on an amount which shall be presumed to be the amount of damage sustained by a breach thereof; when, from the nature of the case, it would be impracticable or extremely difficult to fix the actual damage." *18 GCA § 88104.* <https://col.guamcourts.gov/sites/default/files/18gc088.pdf>
+
+[^q6-ie-tradesecret]: **Island Eye Center, Inc. v. Lombard** — "Therefore, we hold that the definition of trade secrets in 9 GCA § 43.10(f) is the definition of trade secrets for civil trade-secret-misappropriation claims." *Island Eye Ctr., Inc. v. Lombard, 2020 Guam 32.* <https://case-law.vlex.com/vid/island-eye-ctr-v-1039283384>
+
+[^q6-ie-shield]: **Island Eye Center, Inc. v. Lombard** — "Trade-secret protection should be a shield, not a sword used by employers to retain its employees by threat of rendering them substantially unemployable in their field of experience or prevent workers from pursuing their livelihoods when they leave their current positions." *Island Eye Ctr., Inc. v. Lombard, 2020 Guam 32.* <https://case-law.vlex.com/vid/island-eye-ctr-v-1039283384>