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Kennedy v. The Shave Barber Company, LLC

Court of Appeals of Georgia, Third Division

December 20, 2018

PATRICIA KENNEDY
v.
THE SHAVE BARBER COMPANY, LLC.

          ELLINGTON, P. J., GOBEIL and COOMER, JJ.

          GOBEIL, JUDGE.

         The Superior Court of Fulton County granted The Shave Barber Company, LLC's ("The Shave") request for an interlocutory injunction against Patricia Kennedy. The injunction restrains Kennedy from competing with The Shave and from soliciting its customers and employees. Kennedy appeals, contending that the trial court erred in applying Georgia's Restrictive Covenants Act, OCGA § 13-8-50, et seq. (the "Act"). Finding no error, we affirm the trial court's findings related to the restrictive covenants and its grant of an interlocutory injunction against Kennedy.

         The record shows that in 2015, Kennedy began working as a master barber for The Shave, a barbershop in Atlanta's Virginia-Highland neighborhood that caters to men and provides hair cutting, shaving, and other grooming-related services and products. Kennedy and other employees of The Shave worked on a "commission only" basis, and were paid a percentage of their sales of services and products. The Shave's primary connection to its customers is through its stylists and barbers, and it uses social media to promote the business and individual barbers. While employed at The Shave, Kennedy used various social media accounts to inform customers of her schedules, promote products, and to show photographs of haircuts or services she had provided to customers. Most of Kennedy's social media posts were made on her professional page titled "PK Does Hair."

         When Kennedy began her employment, she was classified as an independent contractor. However, following the departure of two employees of The Shave, both of whom opened competing barbershops in close proximity to The Shave, [1] the previous owner of The Shave required its stylists to sign employment contracts. In October 2016, Kennedy signed an agreement (the "agreement") which classified her as an "employee" of The Shave and contained several restrictions on her post- employment activities.[2] Under the terms of the contract, Kennedy agreed not to work in the men's grooming industry within a three-mile radius of The Shave for two years after leaving her employment with The Shave (the "non-compete" provision); she also agreed not to solicit customers or employees of The Shave for one year after leaving her employment. Specifically, the agreement provided:

7. As part of the consideration for making this Agreement and in consideration of continued employment, for a period of one (1) year after termination of employment with THE SHAVE, Employee shall refrain from (i) interfering with or soliciting or attempting to solicit, for any business in the barber, salon[, ] or men's grooming industry, any customer or potential customer of THE SHAVE with whom Employee had any personal contact or learned of or was introduced to during the term hereof and (ii) recruiting or soliciting or attempting to recruit or solicit any employee or agent of THE SHAVE for any business in the barber, salon[, ] or men's grooming industry within a three (3) mile radius of THE SHAVE . . .
8.For a period of two (2) years after termination of employment with THE SHAVE, Employee shall not directly or indirectly compete with THE SHAVE by owning, managing, operating, representing, promoting, selling for, soliciting for, consulting for, controlling, or participating in the ownership, operation, acquisition, or management of a business selling or providing [] services the same or similar to that provided by THE SHAVE within a three (3) mile radius of any SHAVE location. . . .

         As part of the agreement, Kennedy acknowledged that she would "be customarily and regularly soliciting for THE SHAVE customers or prospective customers." The parties also agreed that, in the event of a breach or threatened breach, "the ascertainment of damages . . . would be difficult" and that The Shave "shall have the right to injunctive relief or other similar remedy in order to specifically enforce the provisions" of the agreement.

         Kennedy resigned her position at The Shave in December 2017. She announced her last day of work for The Shave via social media by posting a photo of her work station; by tagging The Shave, this posted announcement appeared on The Shave's social media accounts. Brian Harn, The Shave's owner, discovered that Kennedy planned to open a new salon within three miles of The Shave, and he informed her that doing so would violate the agreement. Kennedy acknowledged that her new salon was located within three miles of The Shave, but she informed Harn that she would be faced with financial ruin if she were unable to open her new business as planned. Kennedy opened her salon, "PK Does Hair," on January 4, 2018. The new salon's location is 2.1 miles from The Shave. She continued using her "PK Does Hair" social media accounts to solicit customers, and she re-posted photos taken at The Shave of its customers and tagged these customers in the posts.[3] On January 23, 2018, in a video posted to her personal Facebook page, Kennedy stated that "being your own boss is great" and referenced a then-current employee of The Shave by name.

         Thereafter, on January 24, 2018, The Shave sued Kennedy for damages and injunctive relief, claiming she breached the terms of the employment contract. The Shave sought an interlocutory injunction pending a full adjudication on the merits of its underlying claims.[4] Kennedy challenged the enforceability of the contract, counterclaimed for violations under the Fair Labor Standards Act (29 USC § 216 (b)), and sought overtime compensation. On February 5, 2018, the trial court held a hearing on The Shave's request for interlocutory injunction and heard testimony from Harn and Kennedy. On February 26, 2018, the trial court found the agreement's restrictive covenants reasonable and enforceable and granted The Shave's motion for an interlocutory injunction, enjoining Kennedy from

owning, operating, promoting, selling for, soliciting for, consulting for, controlling or participating in the ownership, operation, or management of a business selling or providing the services the same or similar to that provided by The Shave within a three-mile radius of The Shave . . . .
interfering with or soliciting or attempting to solicit . . . any customer or potential customer of The Shave with whom [Kennedy] had any personal or material contact . . . .
recruiting or soliciting or attempting to recruit or solicit any employee or agent of The Shave . . . .

         The trial court limited the geographic scope of the non-compete restriction to within a three-mile radius of The Shave's current location in the Virginia-Highland neighborhood. Kennedy now appeals, arguing that the trial court erred in granting injunctive relief.

         Applying to employment agreements entered into after May 11, 2011, the Act governs the restrictive covenants in this case.[5] In the Act, the General Assembly recognizes that "reasonable restrictive covenants contained in employment and commercial contracts serve the legitimate purpose of protecting legitimate business interests . . . ." OCGA § 13-8-50. Further, the General Assembly expressed its intent "to provide statutory guidance so that all parties to such agreements may be certain of the validity and enforceability of such provisions and may know their rights and duties according to such provisions." Id. We are also mindful that the Act requires a court's construction of 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." OCGA § 13-8-54 (a).

         Regarding a trial court's decision to issue an interlocutory injunction, our Supreme Court has held that

[a]n interlocutory injunction is an extraordinary remedy, and the power to grant it must be prudently and cautiously exercised. However, to be effective, the decision to grant an interlocutory injunction must often be made under time constraints that do not allow for the careful deliberation and reflection that accompany a full trial on the merits. Thus, the trial court must make a judgment call regarding the equities presented, and the court is vested with broad discretion in making that decision. . . . The grant or denial of an interlocutory injunction will not be reversed on appeal unless the trial court made an error of law that contributed to the decision, there was no evidence on an element essential to relief, or the court manifestly abused its discretion.

City of Waycross v. Pierce County Board of Commissioners, 300 Ga. 109, 110-111 (1) (793 S.E.2d 389) (2016) (citations and punctuation omitted). With these guiding principles in mind, we now turn to ...


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