Yes! In Georgia, employers do have the capacity to impose non-compete agreements signed by employees. Georgia has specific rules in place intended to make enforcing these agreements more straightforward and more accessible than in other states.
Changes in Georgia’s Non-Compete Laws
In the state of Georgia, the laws related to non-compete agreements have been revised multiple times in the past few years. To make it easier for employers to implement non-compete agreements, Georgia state legislators enacted a new law. Once the law was established, Georgia companies began assertively enforcing their non-compete agreements. Soon after the law was enacted, though, the State Supreme Court found that the law was in contravention of the Georgia Constitution as it inhibited healthy competition.
After the ruling, the Georgia Constitution was revised to sanction for enforcement for the new law. Once the revision was accepted, the law related to non-compete agreements was approved once more and took effect, resulting in any non-compete agreement signed after May 2011 becoming enforceable.
The new law is especially advantageous for businesses in the state, as it makes enforcing non-compete agreements much simpler. Before the approval of the law, most non-compete agreements were regarded as unenforceable and invalid.
The old regulation in Georgia was that a non-compete wasn’t enforceable if the contract embodied any unenforceable terms. The new law’s usefulness is that an agreement is not considered void merely because it contains an unenforceable term. As an alternative, the court can extract these terms while also leaving the overall agreement complete. To circumvent an extended legal process, businesses should evaluate their non-compete agreements to ensure all the conditions are enforceable.
Writing Non-Compete Agreements
If you would like to use non-compete agreements for a Georgia business, there are five factors to bear in mind:
- For a non-compete agreement to be considered valid in Georgia’s state, the contract must contain consideration, which is something of value. You need to provide one of your current employees something of value in exchange for their signature if you want them to sign one of these agreements. The consideration of your agreement is entirely at your discretion and can vary from separate agreements.
- The “blue pencil” rule applies to non-compete agreements, meaning that courts in Georgia are now allowed to amend non-compete agreements instead of discarding them entirely. Courts can void unenforceable terms from a non-compete agreement under the condition that, in doing so, the agreement would not become more restrictive.
- Bear in mind that you can utilize the non-compete agreements for four categories of employees in Georgia:
- Employees in management positions.
- Employees who frequently solicit business from clients.
- Company professionals or vital employees.
- Sales staff.
If an employee does not fit into any of the specified categories, they do not qualify for a non-compete agreement, and a non-compete agreement would be considered unenforceable in the court of law after the employee’s termination. The new law permits employers to define what types of activities are deemed competitive extensively.
- Additionally, employers are permitted to include any prospective territories when writing a non-compete agreement. If an employer doesn’t have a geographical presence but intends to expand to a later location, it can prevent the employment of former employees in these areas for the duration of the non-compete agreement.
The state of Georgia’s non-compete agreement law has a clause for the solicitation of former clients. Court decrees have determined that it is feasible to inhibit former staff members from soliciting other staff or clients so long as other the former staff member had business exchanges with these individuals. Preventing former staff members from seeking clients with which they’ve had no prior business relationship is not feasible.
- The final consideration pertains to non-disclosure provisions. Earlier, Georgia law limited the duration of non-disclosure provisions. If a time limit were not outlined for the requirements, or if the non-disclosure duration was too long, courts would not impose the provision. Under the new law, non-disclose provisions remain in effect as long as the details covered by the agreement continue to be a trade secret or need to stay confidential for the prosperity of the business.
If you require help comprehending whether non-compete agreements are enforceable in the state of Georgia, please contact Hasson Law Group LLP for more information.
Hire a Non-Compete Agreements Attorney Today
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