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Employment Agreements

In the fall of 2010 and the spring of 2011, the Georgia Legislature, through House Bill 173, enacted what amounts to a sea-change in the laws governing restrictive covenants in employment agreements for Georgia employers.  In a nut shell, the new law makes it easier for Georgia employers to enforce non-competition agreements, and harder for employees to argue a non-competition agreement is unenforceable.  Before House Bill 173, Employers had a relatively difficult time enforcing non-competition covenants against employees because if one portion of a non-competition covenant was deemed too restrictive, the entire non-competition agreement between employer and employee would be thrown out and declared void.  The new law gives employers safe harbor in crafting non-competition agreements and allows a court to mark-out overly broad restrictions without voiding the entire agreement.

There are several reasons an employer would want to have employees enter into non-compete agreements.  First, a non-compete agreement gives employers a tool to help prevent themselves from training their employees to work for the employer’s competition. Second, a non-compete agreement protects a company’s investment in employee training and client development, and may provide more stability in the workplace.

The office of Smith, Gilliam, Williams & Miles has helped local and national companies draft non-compete agreements under Georgia’s new law.  In addition to drafting non-competition agreements, the attorneys at SGWM typically will recommend that an employer also ask employees to sign confidentiality agreements and non-solicitation agreements.  In a confidentiality agreement, an employee will be asked to promise not to share an employer’s confidential information, such as technical processes, customer lists, vendor contracts, or price schedules. A non-solicitation agreement will ask the employee to agree not to solicit either customers or other employees of the employer for a certain period of years after the employee’s employment has ended with the employer. 

Because of experience in drafting and litigating non-competition agreements, our attorneys also provide excellent insight into contracts or agreements which an employee is asked to sign when beginning a new job or receiving a promotion, so that a potential employee can understand what rights are being limited by a non-competition agreement.