For many years, Georgia employers have relied on clerical and administrative staff or employee/payroll services to handle responding to routine garnishments.
For many years, Georgia employers have relied on clerical and administrative staff or employee/payroll services to handle responding to routine garnishments. On September 12, 2011, the Georgia Supreme Court issued a decision (the “Decision”) that will require employers to immediately change their practices. The Decision now requires employers to retain counsel when responding to garnishment actions filed in Georgia courts of record. As a result of the Decision, a garnishment action filed in a Georgia court of record now needs to be treated in the same manner that an employer would treat any other lawsuit. Employers who fail to retain counsel to represent them in responding to a garnishment proceeding filed in a Georgia court of record do so at their peril: the Decision stated that any non-lawyer who answers a garnishment on behalf of a corporation or other entity is engaged in the unauthorized practice of law, and a default judgment against the employer may be the result.
On June 4, 2010, the State Bar of Georgia’s Standing Committee on the Unlicensed Practice of Law (the “State Bar”) issued Advisory Opinion No. 2010-1. In this opinion, the State Bar observed that “[a] properly served garnishee is bound to file an answer with the appropriate court. If the answer is not filed, the garnishee faces a default judgment. The inescapable conclusion is that a garnishment action is a legal proceeding.” The State Bar went on to observe that although Georgia citizens have a constitutionally protected right of self-representation, only licensed attorneys in Georgia are authorized to represent corporations in a proceeding in a “court of record” (a Georgia state or superior court) – or any proceeding that may be transferred to a court of record from a court not of record (such as a Georgia magistrate court).
Since the State Bar’s opinion was not binding at the time it was issued, many – if not most – Georgia employers did not change their practices for handling routine garnishments. Given that the Georgia Supreme Court has now adopted the State Bar’s Opinion as of earlier this month, employers must now adjust their businesses practices immediately to comply with the Court’s ruling.
It goes without saying that the Decision will impose a seemingly unnecessary cost burden on Georgia businesses at a time when all businesses are struggling to keep costs down in a tough economy. In apparent recognition of this burden, Georgia Supreme Court Justice David Nahmias noted in a concurring opinion attached to the Decision that businesses who are unsatisfied with the Court’s decision were free to “seek a remedy” from the state legislature to allow non-lawyer employees to file garnishment answers. For the time being, however, Georgia employers have no choice but to comply with the Court’s ruling.
Tips for Employers to Reduce Costs in Dealing with Attorneys on Garnishments
There are several steps that employers can take to reduce the costs associated with having an attorney handle a garnishment on their behalf in Georgia.
First, the more organized and complete the information is when your attorney receives it, the less time your attorney will spend gathering basic information necessary to respond to a summons of garnishment. If you do the “leg work” before you contact your attorney, such as by gathering dates of employment for the garnished employee, determining exact wages earned and hours worked during the relevant time frame as well as the dates and amounts of paychecks received by the employee at issue, this will reduce the time that your attorney will otherwise need to spend gathering this information which will lower your costs. It is also helpful for your attorney to know from the outset any other details that may impact the amount of money that will need to be paid to respond to the garnishment, such as the existence of other pending garnishments or the termination of the employee’s employment prior to service of the summons of garnishment at hand. In addition, it is also helpful to have one person designated to serve as the “point person” in gathering any information necessary to respond to the garnishment to reduce duplication of efforts and inefficiencies.
Finally, and at the risk of overstating the obvious, it is advisable for employers to get any information regarding a garnishment to their attorneys as soon as possible to avoid the risk of having a default judgment entered and the additional expense associated with getting it set aside. Although this can be done as a matter of right under Georgia law in most typical garnishment default situations, it is an expense that employers can avoid if garnishments are handled in a timely manner from the beginning.
We will continue to monitor this issue and will keep you updated in the event that business groups are successful in convincing the Georgia state legislature to pass a statute permitting non-lawyer employees to respond to garnishments. In the meantime, employers must hire an attorney to respond to any summons of garnishment filed in Georgia – or risk being found to have engaged in the unauthorized practice of law.
For additional information, contact Joseph C. Chancey at (404) 885-6222 or firstname.lastname@example.org or Megan Mathews Noble at (404) 885-6142 or email@example.com.