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How to Negotiate a Non-Compete Contract In Georgia Part One

Thumbnail image for Contract Newer.jpg“How can I be sure that this non-compete contract is fair and enforceable?” is a question many clients ask us whether they be employers or employees.

For employers:

Our advice is this: Don’t go it alone! Believe it or not, there are many employers who think that it is okay to just “cut and paste” whatever contract they find googled over the internet. This is the fastest way to draft a bad contract. The most important thing for any contract is enforceability. That means you know that in the event of a dispute your contract will hold up as “enforceable” in a court of law. Cutting and pasting a contract is the surest way to have your important legal agreement fail to hold up in a court of law, thus failing to protect your and your company.

The law in Georgia changes regularly and in 2010 the legislature made very important revisions to the laws on non-compete contracts. These laws were passed in November 2010 and actually went into effect in January 2011 for all new non-compete contracts. If you have a non-compete contract signed prior to November 2010, the old law will still apply.

In any event, the contracts that employers regularly find on the internet are generally out of date, and worse, often have laws applicable to another state entirely. For example, the laws in Arizona concerning non-compete may be very different then the laws in Georgia.

Unless you are applying federal law (which applies to all states, e.g. laws on employment discrimination under Title VII of 42 U.S.C. § 2000e), every state has different laws. The laws in Georgia may be very different than the law in Alabama, Tennessee, or New York. Thus, the contract you cut and pasted off the internet very possibly may be created under a different state’s law and will not even be applicable to Georgia.

Consequently, it is important to obtain the assistance from an attorney who can help you successfully navigate the law and insure that you create a contract that protects your interests.

For employees:
Unfortunately, many times the non-compete clause your employer wishes you to sign may not have been properly drafted by a competent attorney. Therefore, a lot of times we have clients who present non-compete contracts that their new employer wishes them to sign which are not even in compliance with Georgia law. Before you sign a non-compete contract, make sure an attorney reviews this document in order to protect your interests. The lawyer can tell you whether the contract is in fact legal or not, whether it will likely be too restrictive for you in the future, the likelihood of its enforceability, and whether it makes sense for you to negotiate certain provisions.

Prior to the new law, Georgia did not alow “blue-penciling” which meant if a non-compete law had an illegal section, the whole non-compete contract could be deemed void and thrown out. Now, with the recent changes in Georgia, the courts will allow the invalid section to be removed or made compliant with the law, but the rest of the contract will still apply. This change protects employers, but does not protect employees.

Consequently, before you sign your name on the dotted line, make sure you know what you are signing by seeking legal counsel to protect your interests.