The following are frequently asked questions and answers regarding non-compete agreements and other restrictive covenants under Georgia law. Please note that the law of Georgia and other states in this area is often very complex. Thus, the following should not be construed as legal advice or relied upon in taking any action relative to the subject matter. Consultation with a non-compete attorney such as Atlanta, Georgia non-compete lawyer Dave Roberts regarding the specifics of your case should be sought by employers and individuals prior to making any decisions in this area that could have adverse legal and financial implications.

1. What is a non-compete agreement? (What are the differences between and among non-compete, non-solicitation and confidentiality provisions)?

Lawyers often use the term "restrictive covenants" to describe four (4) main type of provisions commonly found in employment agreements - (1) non-compete provisions, (2) non-solicitation of customers provisions; (3) non-solicitation of employees or "anti-raiding" provisions; and, (4) confidentiality or non-disclosure provisions. These provisions are sometimes collectively referred to as "non-competes" by lay persons. In fact, a non-compete provision is quite different from a non-solicitation or confidentiality provision and vice-versa. Georgia courts readily distinguish non-compete agreements from customer and employee non-solicitation provisions and confidentiality/non-disclosure provisions.

Non-compete agreements are primarily deigned to restrict a person from competing against his or her former employer by starting his own business or working for a competitor in the same field as his former employer. An employee could breach an enforceable non-compete agreement by simply holding a job with a competitor even if he or she doesn't solicit or take a single customer from his or her former employer. A covenant not to compete normally is designed to protect the employer's investment of time and money in developing the employee's skills in addition to other “protectable interets” of the employer.

A covenant not to solicit customers is designed primarily to protect the employer's investment of time and money in developing customer relationships and prohibits an employee from soliciting the employer's clients subsequent to their termination. Unlike non-compete agreements, non-solicitation agreements (standing alone) do not generally restrict a former employee from working for a competitor in a given capacity. For example, a person bound only by an enforceable customer non-solicitation provision could possibly sell insurance for herself or for a competitor of his or her former employer for as long as he or she doesn't sell insurance to former customers of his or her former employer.

Non-solicitation of employee provisions or "anti-raiding" provisions are designed to keep former employees from inducing other employees to leave the former employer and work for a competitor. Confidentiality or non-disclosure provisions are frequently used in conjunction with non-compete and non-solicit agreements. They protect a business against a current or former employee disclosing confidential, proprietary or trade secret information.

2. Are non-compete provisions enforceable in Georgia?

Yes. But it is very difficult to do so and 85-90% of such agreements we review are, in fact, not enforceable. While Georgia is typically a very "pro-employer" state, Georgia courts have long disfavored non-compete agreements and apply "strict-scrutiny" to such provisions executed in the context of an employer-employee relationship. The enforceability of a non-compete agreement in Georgia most often depends on the language of the agreement being in precise conformity with the law, and the circumstances in which the agreement was executed. There are many, many loopholes in Georgia that will invalidate a non-compete provision. Accordingly, companies and individuals attempting to draft, enforce or interpret non-compete provisions should consult with a qualified attorney such as Atlanta, Georgia non-compete attorney Dave Roberts.

3. What specific requirements make a non-compete provision enforceable in Georgia?

To be enforceable in Georgia, a covenant not to compete must first and foremost protect a legitimate business interest and be reasonable in terms of time, geographical area, and the scope of activity to be restrained. While there are other requirements for enforceability including a general requirement of "reasonableness under the circumstances," these are the primary areas of inquiry by a Georgia Court.

4. If a non-compete agreement is found to be unenforceable by a Georgia court, can the court modify the non-compete to make it enforceable?

No. Unlike most other states, Georgia will not "blue-pencil" a non-compete provision to bring it into conformity with the law. An exception to this rule arises in the context of a non-compete agreement executed in connection with the sale of a business.

5. Are there different standards for determining the enforceability of non-compete agreements executed in the context of a partnership agreement or the sale of a business?

Yes. While Georgia courts apply "strict scrutiny" to non-compete agreements executed in the traditional employer-employee setting, a "middle-level" scrutiny is applied in the context of a partnership agreement and "lesser scrutiny" is applied in the context of a non-compete executed in conjunction with the sale of a business.

6. . Is there a statute or law "on the books" in Georgia that governs the enforceability of non-compete agreements?

While the Georgia Constitution prohibits contracts which may have the effect of lessening competition, Georgia does not have a "non-compete statute" like other states such as Florida. Instead Georgia non-compete law is governed by the "common law" (previous decisions of Georgia courts). Accordingly, it is imperative that any attorney representing clients in Georgia non-compete law matters be very familiar with the relevant cases in this area. Dave Roberts and The Roberts Firm devote a significant part of their practice to cases involving Georgia non-compete law.

7. Can an employee be fired for refusing to sign a non-compete agreement after he or she begins employment? In such a case, can the non-compete be held to be enforceable?

Georgia is a strong "at-will" employment state meaning that absent an agreement for employment for a specified period of time, a Georgia employee can be fired for a good reason, a bad reason or no reason at all so long as the termination is not based on race, sex, religion or other protected classes or circumstances. Thus, in Georgia, an employee can be fired for refusing to sign a non-compete agreement.

8. If an employee is required to execute a non-compete agreement after he or she begins employment, must the employer provide the employee some additional "consideration" in exchange for the non-compete agreement?

No. As noted above, Georgia employers can insist that employees execute non-compete agreements after the employment relationship begins. In such case, an employer in Georgia does not have to provide additional consideration as the court will consider the employees "continued employment" to be adequate consideration. This is not the law in other states such as North Carolina.