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Non-Compete Agreements and Legal Implications

Non-Compete Agreements and Legal Implications

Employment contracts should be fair, reasonable, understandable, and legally enforceable.  This is particularly true when it comes to limiting someone’s ability to work, and also protecting trade secrets, confidential information, customer lists, and investments in employee training and recruiting.  Often times, non-compete agreements are created to address these important issues involved in the employer-employee relationship.

Understanding Georgia’s Non-Compete Law

Non-compete agreements (sometimes referred to as “covenants not to compete” or “restrictive covenants”) commonly result in disputes after the conclusion of an employment relationship, because these agreements prohibit an employee from leaving one job and then engaging in the same type of business for another employer.  They typically only last for a specific period of time, and apply to a limited geographic area.  Non-competes are common in the IT field or in companies with highly compensated sales reps.

Georgia’s non-compete law recently changed, and the state’s approach to these cases continues to evolve. Whether the new law applies to you depends on several factors, most notably the date on which the agreement was entered into.

Reasons Non-Compete Agreements Are Declared Unenforceable

In Georgia, a non-compete agreement may be declared unenforceable or invalid for a number of reasons, including:

  • An unreasonable time period (under the newest version of Georgia’s non-compete law, restraints lasting more than 2 years are presumed unreasonable)
  • An unreasonable restriction on geographic territory
  • Failure of the agreement to satisfy the basic requirements of contract formation
  • The individual doesn’t fall into the category of employees against whom non-compete agreements can be enforced

Determining the Legality of a Non-Compete Agreement

When dealing with the complex legal issues involves in restrictive covenants, it’s always best to consult with an experience employment attorney who can help you determine:

  • If your non-compete agreement is binding
  • Which version of Georgia’s non-compete law applies to your employment contract
  • Whether non-compete agreements are even enforceable for the type of job you had (this question can be very complicated)
  • If your agreement meets Georgia’s basic contract requirements
  • Whether restrictions on time & territory will likely be deemed “reasonable” by a Georgia court
  • Whether you should redraft or renegotiate your employment contract(s)
  • How you should proceed with new jobs or business opportunities

Remember that the law in this area is changing all the time, especially in Georgia, where courts are still sorting out all the details of the new statute.

If you need help with a non-compete agreement in Georgia, contact attorney K.P. Reddy at The Reddy Law Firm, P.C.  Our firm has years of experience in drafting, negotiating, enforcing, and litigating employment contracts for clients in Atlanta, Suwanee, Marietta, Gainesville, Johns Creek, and across the State.  Please call (678) 629-3246 for a free phone consultation today.