Restrictive Covenants

Employment Lawyers Representing Clients in Atlanta and Surrounding Areas

Employees are often entrusted with company trade secrets, client lists, and other confidential information that gives their employer an edge over their competitors. Employers may wish to restrict what their employees are able to do while employed, and they may even wish to restrict employee conduct after their employment has ended. It can be critical to retain an experienced Atlanta employment lawyer to negotiate, draft, and litigate restrictive covenants. These agreements may include non-disclosure or confidentiality agreements, non-compete clauses, non-solicitation clauses, trade secret agreements, and unfair competition-related agreements. Our attorneys have handled litigation related to competition, including both enforcement and challenges to these agreements. We have also advised and represented businesses that are trying to recruit employees who are subject to restrictive covenants.

Understanding Restrictive Covenants

Georgia’s Restrictive Covenants Act changed the prior Georgia law in connection with restrictive covenants and made it easier for restrictive covenant clauses and agreements to stand. Under the Restrictive Covenants Act, a court is empowered to modify an overly broad restrictive covenant. This means that a court can remove or cut off a portion of a restrictive covenant that otherwise renders the covenant unenforceable. However, a court is not allowed to rewrite a restrictive covenant to make it impose a legally acceptable limitation on an employee’s ability to work.

The Restrictive Covenants Act provides a definition for confidential information. Under section 13-8-53(e), when there is a non-disclosure provision related to confidential information, it does not need to be limited in terms of time in order to be considered enforceable by a court.

With regard to not soliciting customers, provisions of a restrictive covenant can fail if they are not narrowly crafted to apply only to customers with whom an employee has interacted for business purposes. Covenants may be phrased in order to stop all business with customers instead of specifically the kind of business offered by the employer. Furthermore, the Restrictive Covenants Act defines “material contact” such that a non-solicitation agreement can encompass not only customers with whom an employee actually interacted on the job, but also others. These others include customers whose relationship with the employer was supervised or coordinated by the employee, about whom the employee got confidential information while working for the employer, or in connection with whom the employee received earnings, commissions, or compensation in the two years prior to termination.

The Restrictive Covenants Act also allows for non-compete provisions to be enforced only against employees who regularly and customarily solicit prospective customers or existing customers, regularly and customarily are involved in making sales, have primary duties of managing companies or their subdivisions or departments, direct the work of two or more employees and have the authority to terminate or hire other employees, or perform the duties of a professional as defined by the Restrictive Covenants Act.

Georgia Law for Restrictive Covenants Put in Place Before 2011

Any restrictive covenant that was put in place before January 1, 2011 is controlled by the law that existed before the Restrictive Covenants Act went into effect. The law existing before the Restrictive Covenants Act did not allow a court to modify or strike the agreement language, so that agreement would survive or not based on its language, and that language needed to be narrowly tailored with regard to scope, territory, and time. Non-compete provisions would not be enforced if they reached far beyond the geographic territory where the employee had performed their work or if they were not sufficiently defined in terms of time. A non-compete provision could also fail if it tried to prevent an employee from performing generally competitive services, rather than services performed for the employer.

Discuss a Restrictive Covenant with a Skillful Atlanta Attorney

Restrictive covenants can present various challenges for employers or employees. At Parks, Chesin & Walbert, we have had a number of successes in this area. For example, we won an appellate case that struck down a lower court ruling that a non-competition agreement was overly broad for enforcement purposes. We also negotiated a buyout of two doctors’ non-compete agreements so that they could work for a competing hospital. Our firm has a strong reputation for innovative solutions, and we have earned respect for securing justice. Our Atlanta attorneys represent clients in Fulton, DeKalb, Gwinnett, Forsyth, and Glynn Counties. Call us at 404-873-8048 or complete our online form.