Reasonableness Determinations Restricting Time; Presumptions

1. Law
2. Georgia Code
3. Contracts
4. Illegal and Void Contracts Generally
5. Restrictive Covenants in Contracts
6. Reasonableness Determinations Restricting Time; Presumptions

1. In determining the reasonableness in time of a restrictive covenant sought to be enforced after a term of employment, a court shall apply the rebuttable presumptions provided in this Code section.
2. In the case of a restrictive covenant sought to be enforced against a former employee and not associated with the sale or ownership of all or a material part of:
   1. The assets of a business, professional practice, or other commercial enterprise;
   2. The shares of a corporation;
   3. A partnership interest;
   4. A limited liability company membership; or
   5. An equity interest or profit participation, of any other type, in a business, professional practice, or other commercial enterprise,

      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.

3. In the case of a restrictive covenant sought to be enforced against a current or former distributor, dealer, franchisee, lessee of real or personal property, or licensee of a trademark, trade dress, or service mark and not associated with the sale of all or a part of:
   1. The assets of a business, professional practice, or other commercial enterprise;
   2. The shares of a corporation;
   3. A partnership interest;
   4. A limited liability company membership; or
   5. An equity interest or profit participation, of any other type, in a business, professional practice, or other commercial enterprise,

      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.

4. In the case of a restrictive covenant sought to be enforced against the owner or seller of all or a material part of:
   1. The assets of a business, professional practice, or other commercial enterprise;
   2. The shares of a corporation;
   3. A partnership interest;
   4. A limited liability company membership; or
   5. An equity interest or profit participation, of any other type, in a business, professional practice, or other commercial enterprise,

      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.

(Code 1981, §13-8-57, enacted by Ga. L. 2011, p. 399, § 4/HB 30.)

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