{"id":597,"date":"2010-12-10T17:05:43","date_gmt":"2010-12-10T17:05:43","guid":{"rendered":"https:\/\/www.bfvlaw.com\/georgias-new-non-compete-law-answers-to-frequently-asked-questions\/"},"modified":"2010-12-10T17:05:43","modified_gmt":"2010-12-10T17:05:43","slug":"georgias-new-non-compete-law-answers-to-frequently-asked-questions","status":"publish","type":"post","link":"https:\/\/www.bfvlaw.com\/georgias-new-non-compete-law-answers-to-frequently-asked-questions\/","title":{"rendered":"Georgia’s New Non-Compete Law: Answers to “Frequently Asked Questions”"},"content":{"rendered":"

Q.<\/strong> What is the buzz surrounding the new non-compete\u00a0law in Georgia about?\u00a0<\/strong><\/p>\n

\u00a0\u00a0\u00a0<\/em>A.\u00a0<\/strong>On November 2, 2010, a majority of Georgia voters voted in favor of Amendment One.\u00a0 The passage of this referendum means that legislation changing Georgia\u2019s law on restrictive covenants, which was previously passed by the Georgia legislature, will go into effect.<\/p>\n

Q. What does this mean?<\/strong><\/p>\n

<\/em>A.\u00a0 <\/em><\/strong>Georgia law has been changed to make it much easier to enforce non-competes and other restrictive covenants against employees who leave their employers and go to work for competitors.<\/p>\n

Q. Is the new law already in effect?<\/strong><\/p>\n

A.<\/strong>\u00a0\u00a0 Technically, yes. \u00a0However, the amendment to Georgia\u2019s Constitution does not go into effect until January 1, 2011. \u00a0Until the amendment goes into effect, the new law is arguably unconstitutional. Therefore employers should wait until the beginning of the year before having their employees sign revised employment agreements.<\/p>\n

Q.\u00a0\u00a0 How has the law changed?<\/strong><\/p>\n

<\/em>A.\u00a0 <\/em><\/strong>Georgia law was previously very unfavorable toward the enforcement of non-competes and other restrictive covenants in employment agreements.\u00a0 If a restrictive covenant was found to be overly broad and unenforceable, the entire covenant was ruled invalid.\u00a0 Also, if a non-compete or non-solicit provision in an agreement was found to be invalid, the other non-compete or non-solicit provisions in that same agreement were deemed invalid as well. \u00a0Thus, more often than not, courts ruled in favor of the employee in these cases, and employers were left with little or no protection.\u00a0 The new legislation changes these rules and permits courts to modify overly broad restrictive covenants rather than striking them down entirely.<\/p>\n

Q.\u00a0\u00a0 If I am an employer, what do these changes mean for me?<\/strong><\/p>\n

<\/em>A.\u00a0 <\/em><\/strong>It should become significantly easier for employers to enforce restrictive covenants, such as non-competes and non-solicits, against their former employees. \u00a0New agreements may thus be able to provide more protection than was permitted previously.<\/p>\n

Q.\u00a0\u00a0 Does a company need to give the employee anything in exchange for signing an agreement with new restrictive covenants?\u00a0<\/strong><\/p>\n

\u00a0\u00a0 <\/em>A.\u00a0 <\/em><\/strong>Probably not.\u00a0 Traditionally, courts in Georgia have found that continued employment is sufficient consideration for signing a non-compete.\u00a0 There is nothing in the new statute to suggest that this rule has changed.\u00a0 You should therefore consider revising any agreement with employees containing non-competes or other restrictive covenants in early 2011.<\/p>\n

Q.\u00a0\u00a0 A few years ago, I had an employee leave my company and take a position with a competitor.\u00a0 He immediately began calling on the customers he serviced while employed at my company, despite the fact that he had signed a non-solicitation agreement.\u00a0 When I filed suit against him, a court refused to restrict him from soliciting his customers.\u00a0 Does the new law apply to non-solicitation agreements, and will I be able to prevent similar conduct in the future?\u00a0<\/strong><\/p>\n

\u00a0 <\/em>A.\u00a0 <\/strong>Yes, the new law also applies to non-solicits.\u00a0 Employers will likely be able to prevent such conduct in the future.<\/p>\n

Q.\u00a0\u00a0 Does the new law apply to all agreements for all employees?<\/strong><\/p>\n

<\/em>A.\u00a0 <\/em><\/strong>No.\u00a0 It only governs agreements between employers and certain types of employees.<\/p>\n

Q.\u00a0\u00a0 What types of employees does the new law cover?<\/strong><\/p>\n

<\/em>A.\u00a0 <\/em><\/strong>By its terms, the new law applies to three \u201ctypes\u201d of employees:\u00a0 1) executive employees; 2) research and development personnel and persons in possession of important confidential company information; and 3) persons in possession of selective or specialized skills, learning or abilities, customer contacts and information, or confidential information who obtained such skills, learning, abilities, contacts or information by working for his or her employer.\u00a0 The meaning of these terms (and thus the extent of which employees the statute reaches) will likely be developed over time as Georgia courts hear and decide cases concerning these issues.\u00a0 Non-competes with employees who do not meet the requirements of the statute are now not permitted.<\/p>\n

Q.\u00a0\u00a0 Does the new law affect agreements I already have with my employees?\u00a0 And do I need to re-do all of my company\u2019s existing employment agreements?<\/strong><\/p>\n

\u00a0\u00a0 <\/em>A.\u00a0 <\/em><\/strong>The law only applies to agreements entered into on or after the effective date of the legislation, November 3, 2010.\u00a0 Courts therefore should apply Georgia\u2019s old law to agreements entered into before that date.\u00a0 Thus, if the restrictive covenants in your company\u2019s employment agreements comply with Georgia\u2019s old law, you do not necessarily need to re-do your agreements.\u00a0 However, given that under the new law employers are entitled to greater protections, and courts will likely provide employers some protection even if the court finds that a portion of a restrictive covenant is overly broad, employers may wish to revise their agreements.<\/p>\n

Q.\u00a0\u00a0 The new law sounds less strict.\u00a0 Do I still need to hire a lawyer to draft my company\u2019s employment agreements?<\/strong><\/p>\n

\u00a0\u00a0 <\/em>A.\u00a0 <\/em><\/strong>Yes.\u00a0 While the new law provides for greater enforcement of restrictive covenants, there are numerous issues and nuances in the new statute that need to be considered when drafting employment agreements containing restrictive covenants.\u00a0 It is highly recommended that you engage Georgia counsel if you wish to revise your old employment agreements or draft new ones.<\/p>\n

Q.\u00a0\u00a0 Does the new law apply to any other types of agreements?<\/strong><\/p>\n

\u00a0\u00a0 <\/em>A.\u00a0 <\/em><\/strong>Yes, it also governs restrictive covenants in leases, partnership agreements, franchise agreements, distributorship agreements, and agreements governing the sale of a business.<\/p>\n

***<\/p>\n

Please note that the above information should be viewed only as an overview of the new law, and not as a substitute for legal consultation.<\/p>\n","protected":false},"excerpt":{"rendered":"

Q. What is the buzz surrounding the new non-compete\u00a0law in Georgia about?\u00a0 \u00a0\u00a0\u00a0A.\u00a0On November 2, 2010, a majority of Georgia voters voted in favor of Amendment One.\u00a0 The passage of this referendum means that legislation changing Georgia\u2019s law on restrictive covenants, which was previously passed by the Georgia legislature, will go into effect. Q. What […]<\/p>\n","protected":false},"author":4,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"_mo_disable_npp":"","_monsterinsights_skip_tracking":false,"_monsterinsights_sitenote_active":false,"_monsterinsights_sitenote_note":"","_monsterinsights_sitenote_category":0,"footnotes":""},"categories":[4,9],"tags":[20,25,22],"acf":[],"yoast_head":"\nGeorgia's New Non-Compete Law: Answers to "Frequently Asked Questions" - Berman Fink Van Horn P.C.<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/www.bfvlaw.com\/georgias-new-non-compete-law-answers-to-frequently-asked-questions\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Georgia's New Non-Compete Law: Answers to "Frequently Asked Questions" - Berman Fink Van Horn P.C.\" \/>\n<meta property=\"og:description\" content=\"Q. What is the buzz surrounding the new non-compete\u00a0law in Georgia about?\u00a0 \u00a0\u00a0\u00a0A.\u00a0On November 2, 2010, a majority of Georgia voters voted in favor of Amendment One.\u00a0 The passage of this referendum means that legislation changing Georgia\u2019s law on restrictive covenants, which was previously passed by the Georgia legislature, will go into effect. Q. 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