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Early v. MiMedx Group, Inc.

Court of Appeals of Georgia

February 10, 2015

EARLY et al.
v.
MIMEDX GROUP, INC

Cert. applied for.

Restrictive covenants. Cobb Superior Court. Before Judge Ingram.

Erika C. Birg, for appellants.

Berman Fink Van Horn, Benjamin I. Fink, Neal F. Weinrich, Collin L. Freer, for appellee.

OPINION

Page 824

McMillian, Judge.

We granted this interlocutory appeal to determine whether a provision in a Consulting Agreement that requires a designated employee of the Consultant to " devote her full working time" to the performance of the Consultant's duties under the Agreement constitutes an illegal and unenforceable restraint of trade, and if not, whether the

Page 825

provision is enforceable against the employee named in the Agreement, even though she did not expressly agree to be bound [330 Ga.App. 653] by the provision at issue. We answer the first question in the affirmative and thus need not reach the second question.

Pertinent to these issues, the record shows[1] that appellee MiMedx Group, Inc. (" MiMedx" ) develops, manufactures, and markets patent protected biomaterial-based products, including bioimplants made from human amniotic membrane. Appellant Ryanne Early[2] was experienced in this field, and had worked for a " now defunct emerging competitor of MiMedx." Sometime around January 2011, MiMedx and Early entered into negotiations about a possible " business relationship," and later that month MiMedx and Early, as founder and president of ISE Professional Testing & Consulting Services, Inc. (" ISE" ), entered into a " Mutual Confidentiality and Nondisclosure Agreement" (" Nondisclosure Agreement" ) prohibiting Early from disclosing trade secrets and confidential information, which might be revealed to her during negotiations with MiMedx.

A short time later,[3] MiMedx and ISE entered into a Consulting Agreement whereby ISE, as the named " Consultant," would provide product, research and development consulting services to MiMedx related to its amnion products. Paragraph 2 of the Consulting Agreement named Early as the ISE employee who would provide consulting services to MiMedx, and further specified that Early would " devote her full working time (not less than forty (40) hours per week) to [the] performance of Consultant's duties hereunder" (" full-working-time provision" ).

MiMedx terminated the Consulting Agreement in December 2011, and subsequently filed a verified complaint against, inter alia, Early and ISE (collectively referred to as " appellants" ) seeking damages, specific performance and injunctive relief under the Consulting Agreement and the separate Nondisclosure Agreement.[4] Although the complaint set out numerous causes of action against both ISE and Early and specifically alleged that Early had failed to devote her full working time to the performance of the consulting duties under the [330 Ga.App. 654] Consulting Agreement, it did not set out a separate cause of action for breach of that Agreement.

Appellants answered and filed a counterclaim seeking payment for the consulting services which were rendered in December 2011. A short time later, MiMedx filed an amended complaint asserting a cause of action against ISE and Early for breach of the Consulting Agreement. Although MiMedx did not specifically allege which provisions of the Consulting Agreement had been breached, the amended complaint again alleged that Early had failed to devote her full working time to the performance of the consulting duties under the Consulting Agreement and had instead misappropriated MiMedx's trade secret and confidential information to start a rival company.

Appellants subsequently filed a motion for judgment on the pleadings,[5] contending, among other things, that the full-working-time provision[6] of the Consulting Agreement

Page 826

was void and unenforceable as either a general or partial restraint of trade.[7] Following a hearing, the trial court denied appellants' motion for judgment on the pleadings without explanation, and appellants filed an application seeking interlocutory review of that order in this Court. We granted appellants' ...


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