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Lapolla Indus. Inc. v. Hess

Covenants in employment agreements restricting solicitation and hiring of the defendant's current employees and restricting disclosure of the defendant's trade secrets and confidential information were not subject to the non-severability rule, and the trial court erred by applying such to find that they were unenforceable as a matter of law.

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This appeal arises from a claim made by Lapolla Industries, Inc. that a competing business, Premium Spray Products, Inc., and Maclean Hess on behalf of Premium hired, or were attempting to hire, five former employees of Lapolla in violation of non-compete covenants in employment agreements between Lapolla and the former employees. In response to Lapolla’s demand letter that Premium and Hess cease this activity with respect to the former employees, or face legal action for alleged tortious interference with the employment agreements, Premium and Hess filed a declaratory judgment action against Lapolla seeking a declaration that they were not tortiously interfering with Lapolla’s contractual relations with the former employees because the non-compete covenants in the agreements were void and unenforceable.

The trial court entered an order granting a motion by Hess and Premium for a partial final judgment on the pleadings as to count two of the complaint which sought a declaratory judgment as to the non-compete covenants, and pursuant to OCGA § 9-11-54 b the court entered a partial final judgment on count two.1 The court found that, because the pleadings showed that the non-compete covenants in Lapolla’s employment agreements with the former Lapolla employees were void and unenforceable as a matter of law, Hess and Premium were entitled to a declaration that any activities in violation of the non-compete covenants “are not tortiously interfering with and cannot tortiously interfere with Lapolla’s contractual relations with the former Lapolla employees.” The trial court denied a motion by Lapolla and Kramer to dismiss or stay the suit. Lapolla and Kramer appeal from these rulings, and for the following reasons, we affirm in part and reverse in part.

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