Employment Discrimination Blog

Friday, April 6, 2018

Non-Compete Clauses in Georgia

Is my Company's Non-Compete Agreement Enforceable?

Non-compete agreements have become a source of much controversy in recent years.  Some view non-compete agreements as an infringement to a worker’s ability to find jobs in the free market.  For the employer, however, non-competition agreements can prove essential for protecting the employer’s confidential information.  In many states, courts have limited the enforceability of non-compete agreements.  Georgia is considered to be an employer friendly state, but nonetheless non-compete agreements can be struck down if they do not meet certain legal requirements.

The Requirements of a Valid Non-Compete Agreement

Georgia law generally holds that non-competition agreements are enforceable, so long as the following requirements are met:

  1. Consideration: A valid non-compete agreement must be supported by consideration. Consideration is something of value given to the employee in exchange for his or her agreement to abide by the terms of the non-compete. Consideration could take the form of a raise in salary for an existing employee or an employment offer for a new employee.

  2. Valid Business Interest: The non-competition agreement must be created so as to protect a valid business interest. Business interests that need protection include trade secrets and proprietary information. Make sure your non-compete agreement is aimed at the protection of these interests.

  3. Reasonableness: To be enforceable in court, your non-compete agreement must be reasonable in geographic area and the amount of time it covers. For example, your non-compete agreement should set a definite end date. It should also set geographic parameters. A non-compete that goes on indefinitely or attempts to prevent the former employee from finding employee in several states could be struck down.

Georgia’s “Blue Pencil” Rule of Severability

As of 2011, Georgia law includes a rule of severability known as the “Blue Pencil” rule. Under the blue pencil rule of severability, a judge is allowed to modify an overly broad restrictive covenant to render it enforceable, instead of voiding the entire non-compete.  As such, if an employee challenges a broad non-compete agreement, they may still be subject to a less restrictive version.

You can help to avoid litigation and the expenses that come with it by contacting an experienced employment law attorne, like Pankey & Horlock, to draft your non-competition agreement. Protect your company’s trade secrets in a reasonable manner with the assistance of an attorney skilled in drafting such agreements in the state of Georgia.

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