Legal Question in Employment Law in Georgia

Noncompete Agreements

Georgia courts disfavor noncompete agreements. This does not mean, however, that they cannot be enforceable. Like most other states, Georgia courts will only enforce noncompete agreements if they are reasonably limited in terms of georgraphy, time, and scope of prohibited activities. They must also be reasonably necessary to protect an employer's legitimate business interests. However, unlike in many states, courts in Georgia will not enforce overly broad agreements on a limited basis. If the agreement is too broad, a Georgia court will throw it out completely.

Many times, a Georgia employee has signed an agreement that indicates that it will be governed by another state's laws. Sometimes these provisions are enforceable and sometimes they are not. If the noncompete language is interpreted by Georgia courts, they will not interpret the agreement pursuant to the other state's laws if that state restricts an employee's right to work more than Georgia law does. However, if the noncompete agreement states that another state's law applies and that any dispute must be filed exclusively in that other state, Georgia courts generally will not decide the dispute but will require the action to be brought in the other venue.

Sometimes, an action to enforce a noncompete may be brought in more than one state, including Georgia. Often times, this results in a "race to the courthouse," with the former employer trying to bring a claim in the more favorable state for its interests before the employee can file in a state that favors him or her. Therefore, it is very important for an employer or an employee to speak with an attorney eperienced in "restrictive covenants" law to plan a course of action.

There can also be some liability for a company that hires an employee bound by a noncompete from another employer. If the hiring company knows about, or finds out about (even from the former employer), a noncompete, the new hiring company may be found liable for tortiously interfering with the former employer's contractual relations with its former employee. Thus, an employer would be well served to ask potential hires about the existence of such agreements before a formal offer is made and to have such agreements reviewed by counsel.

If you have any questions regarding noncompete agreements, either as an employer, an employee, or a company that wants to hire an employee with a noncompete from a former employer, please feel free to contact me.