This afternoon, the Judiciary Committee of the Georgia House of Representatives unanimously passed HB 173 and HR 178, which would set forth a statutory and constitutional framework for interpreting restrictive covenant agreements related, in particular, to employment.

The House Civil Judiciary Subcommittee debated HB 173, leading to a number of changes. Specifically, the Subcommittee added language setting forth a test (analogous to the exempt/non-exempt test under the Fair Labor Standards Act) to determine whether an employee can be subject to a non-compete provision. Additionally, the Subcommittee added in language permitting courts to take the economic hardship of an employee into account when deciding whether to enforce a restrictive covenant. Finally, the Subcommittee added in language to ensure that courts cannot expand the scope of a restrictive covenant; they can only strike language or reduce the scope of the restrictions based on a rule of reasonableness. The bill passed out of the Subcommittee on March 2, 2009 with a “do pass” recommendation.

The full Judiciary Committee considered the legislation this afternoon. After brief explanatory remarks from the bill’s chief sponsor, Rep. Kevin Levitas, Committee Chairman Wendell Willard expressed happiness with the changes to the bill over the past year. The Committee then passed the bill unanimously.

HB 173 and its companion, HR 178 (a recommended constitutional amendment related to the legislation), will now be before the House Rules Committee. If the Rules Committee passes the bill and the resolution, then they will be eligible for consideration by the House of Representatives itself before teh session ends.