The former employee admitted he broke the deal on purpose – and a jury made him pay
A Georgia appeals court has ruled that an employer can enforce a non-compete in a state where it had no customers of its own, as long as it operated there through an affiliate and had a real presence on the ground.
The May 22, 2026 decision tackles a question that comes up often when companies draft restrictive covenants across multi-state operations: how far does the territory where the employer does business actually stretch?
Total Play, LLC is a North Carolina company in the redemption route business, placing coin-operated gaming machines in bars, restaurants, convenience stores and similar locations. In March 2017, it hired William Brent Galloway as a route manager. Part of his job was to develop new routes in Virginia. The wrinkle: Total Play was not registered to do business in Virginia. Customer gaming contracts in that state were with Liberty Games, LLC, an affiliated company owned by the same person who owns Total Play.
In April 2019, the two sides resolved a dispute over Galloway's pay arrangement. Total Play paid him $250,000. In return, he signed a release agreeing not to engage in the redemption route business in North Carolina and Virginia for five years, until April 15, 2024. The same day, he signed an employment agreement adding a two-year post-termination non-compete tied to wherever he was working when he left.
Galloway voluntarily quit in August 2021. After leaving, he contacted Virginia customers he had dealt with at Total Play and placed 50 of his own gaming machines in 20 other Virginia locations. According to the decision, he admitted he was aware of the covenants, had received two letters from Total Play reminding him of them, and intentionally broke them because he was angry with the owner and believed he had cost him a new job with a Total Play competitor.
Total Play sued in January 2022. The jury found Galloway breached the non-compete covenants and awarded $1 in nominal damages, plus $126,220.53 in attorney fees and expenses.
Galloway appealed. His main argument: the covenants were unenforceable because they covered Virginia, where Total Play had no customers, no contracts and no revenue.
The court was not persuaded. While Total Play had no direct customers in Virginia, it had its own gaming equipment in the state, its own employees there – including Galloway – and a substantial business relationship with its affiliate. Galloway used a Total Play car and cell phone, held a Total Play business card and email address, and was paid his salary and commissions by Total Play for the work he did in Virginia. That combination, the court said, was enough to find Total Play did business in Virginia under the Georgia Restrictive Covenants Act.
The court also found Total Play had legitimate business interests to protect in Virginia, including the time and money it had put into building up the affiliate's customer base in the state and its significant financial investment in Galloway as a key employee.
Galloway scored one partial win. Total Play submitted a lump sum for attorney fees across the whole case, without breaking out how many hours its lawyers spent on the claims it won versus the claims it lost. Under Georgia law, fees have to be apportioned to the winning claims unless the claims are so tangled together that splitting them is impossible. The court reversed the $126,220.53 fee award and sent the issue back to the trial court for an evidentiary hearing.
The takeaway for HR teams in Georgia, and in any state with a similar reasonableness test: when drafting restrictive covenants for employees working across affiliated entities, the geographic scope can sometimes cover territory the employer itself does not technically service – provided there is real operational presence and a legitimate interest to protect. Equipment, personnel, branded materials, and significant investment in the employee can all factor in.
There is also a quieter but expensive lesson on litigation hygiene. If a company sues and wins on some claims but loses on others, the lawyers' invoices need to support apportionment. A single lump-sum bill across the whole case may cost the company its fee recovery, no matter how strong the underlying claims.
