Georgia is getting ready to make a big mistake! In the past, our southern sister state treated employees fairly in dealing with non-compete agreements. Like Virginia, Georgia courts refused to “blue-pencil” invalid and illegal non-compete agreements. In other words, if the non-compete agreement was too broad and onerous to enforce, Georgia courts would not re-write the agreement to make it fair and enforceable. It followed the principal that if the employer, with all of its leverage and advantages, could not draw up a valid non-compete agreement…the court was not going to help them.
This may all change later this year. Why? Because the Georgia legislature has approved a constitutional amendment that will change non-compete law should voters ratify it in November.
A number of changes will take place if the amendment passes including:
1. Georgia courts will be given the authority to blue-pencil contracts to make them enforceable.
2. Non-compete and non-solicitation contracts will be allowed to include a prohibition on acceptance of business from clients…preventing “passive” solicitation when a client/customer follows the departing employee without any efforts by the employee to “take” the client/customer.
3. The law also sets presumptively reasonable non-compete durations: for employment, 2 years; for franchisee or distributors, 3 years; and for a seller of a business, the longer of 5 years or the time during which payments are made for the sale.
My Take: This is bad law and gives employers yet another layer of protection they do not need. If the company’s smart and well-paid lawyers fail to write a valid and enforceable noncompete contract then the court should not lend a hand.