Who benefits if voters tighten noncompete law?
Amendment 1 not personal, spouses say
For the AJC
Claudia Levitas serves as an officer for a business group pushing to strengthen enforcement of noncompete clauses in Georgia law.
Election 2012: Across the nation
Her husband, state Rep. Kevin Levitas, has been pushing for years a constitutional amendment to do just that.
Their relationship has bubbled up into the debate over Amendment 1, which Georgians will either ratify or reject next week at the polls.
Critics suggest Levitas, D-Tucker, had a personal motive for proposing the amendment and a companion bill, a notion that he dismisses as “unfounded and ridiculous.”
Amendment 1 would allow Georgia courts to correct “deficiencies” in noncompete clauses in employment agreements. That, Levitas says, means a court could enforce such clauses even if the situation were slightly different than that described in the contract, as long as the restrictions were deemed reasonable.
Most other states give courts that latitude, and the Levitases argue Georgia is at a competitive disadvantage for recruiting new businesses unless it falls in line.
The noncompete amendment also would apply to franchising, a provision of particular interest to Mrs. Levitas. She is general counsel and senior vice president of Huddle House, the restaurant chain, as well as a member of the Southeast Franchise Forum, which is working with the International Franchise Association (IFA) to get Amendment 1 passed.
The Levitases, who have been married for 16 years, concede their relationship is close. But not so close, Claudia said, that she knew the bill would apply to franchisors before a lawyer friend told her about it a year after it was introduced.
“At that time, I just thought it was employment-related,” she said.
The IFA intervened in late 2007 with a friend-of-the-court brief in a dispute that eventually reached the Georgia Supreme Court.
The high court ruled last year in favor of an Atlanta Bread Co. franchise-owner who challenged a noncompete clause, a decision “that sent shock waves reverberating through the franchise community,” Claudia Levitas said.
Claudia knew of the IFA’s interest in the issue, but she said she didn’t join the fight for Amendment 1 until two months ago, when she responded to the association’s request for volunteers to help build grass-roots support. That was months after her husband’s legislation passed and years after he first introduced it.
In September, she was listed as secretary of Jobs of Tomorrow Inc., a political action committee that registered to promote Amendment 1. Its website offers case studies and features prominently a letter from her husband advocating its passage.
“I just loaned them my name. It’s not a board that meets,” she said. “If it had occurred to me for one second that this would be an issue, I never would have done it.”
While IFA clearly wants Amendment 1 to pass, Levitas fumes at any suggestion that he introduced the bill to help his wife.
“The idea that this is a bill I somehow introduced for my wife is absurd,” he said. “This was my idea. This wasn’t the idea of any business or business organization.”
Levitas said trial attorneys — the type of lawyer who will continue trying to overturn noncompete clauses — were the first to suggest he had a conflict of interest.
They’d say, “You’ve got this enormous conflict. How could you possibly do this?” he said.
In fact, he said, his wife’s paycheck won’t increase a nickel if Amendment 1 passes.
“If this was a bill that somehow put Huddle House as the official food of the state of Georgia,” he said, “that is a conflict.”
In fact, until next year, even that wouldn’t be a conflict.
Georgia’s Ethics in Government Act does not include the words “conflict of interest.” A new law taking effect in January will define that term for legislators for the first time. The Georgia House and Senate will have the power to investigate alleged violations.
Jim Walls, retired investigations editor of The Atlanta Journal-Constitution, runs the watchdog news website Atlanta Unfiltered. Readers may contact him at editor@atlantaunfiltered.com .
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