Can a covenant not to compete or not to solicit be enforced? Is it any good in Georgia?

Your employer wants you to sign a covenant not to compete, or not to solicit clients.Can that be enforced in Georgia?

Some people believe a myth or urban legend that a covenant not to compete or a covenant not to solicit clients will not be enforced in Georgia, and that these clauses on contracts are meaningless. That’s simply not true.

In recent years, Georgia’s laws on these contracts have changed.And they have arguably become more favorable to an employer – at least with respect to certain classes of employees. Before the laws were changed in 2011, the courts interpreted these contracts solely on its face. If all of the provisions were reasonable and valid, they would be enforced, but if there was any problem with the provision, it would be tossed out all together.

Now, the court has the ability to blue-pencil the agreement – that means that they can modify it to make it fit within the bounds of the law – to make an overbroad provision reasonable, if it deems proper, and then enforce that modified provision. So, if your contract with restrictive covenants such as a covenant not to compete or not to solicit was signed on or after May 11, 2011, then these provisions may very well be modified and then enforceable against you.

So, before you leave a job to take another position, be sure to understand what your contractual obligations are, and whether the contract can be enforced. And, before you sign a new contract containing restrictions such as a covenant not to compete or a covenant not to solicit clients or employees, etc., be sure to have it reviewed by a lawyer to help you understand the terms. Then, you can make an informed decision about whether you want to enter into that agreement.

If we can be of help to you with respect to restrictive covenants, employment agreements or other contracts, give us a call to discuss your situation.