August 1, 2010

ATL BUSINESS LAWYERS AND EMPLOYMENT LAWYERS FIGHT NON-COMPETITION (NON-COMPETE) AND NON-SOLICITATION AGREEMENTS WHEN THEY ARE USED UNFAIRLY AGAINST FORMER EMPLOYEES

In my law practice as an ATL Business Lawyer handling employment contracts, I have noticed a sharp increase in Georgia employment contract litigation/lawsuits regarding non-competition and non-solicitation clauses in Georgia employment contracts. It is my opinion that the weak US economy is responsible for the sharp increase in Georgia employment contract litigation. While I believe the US economy shows some signs if improvement, many Georgia companies continue to struggle to make sales forecasts and hold on to employees. To be more specific, it is my opinion the current tough business environment has caused an increase in the number of disputes and lawsuits that involve non-competition or non-solicitation agreements between former employers and employees. In Georgia, non-competition (commonly known by employment attorneys as Georgia non-compete contracts) and non-solicitation contracts are common in many industries and protect the company from former employees who might otherwise compete directly with the company or solicit business from the company’s clients.

Potential employers can become wary of candidates that they are considering hiring once it is discovered that they signed a Georgia non-compete or non-solicitation agreement at a former company. The fear is that the hiring company may be pulled into a lawsuit filed by the employee’s former company. When a former employee is being sued over a non-compete that is invalid, a qualified Atlanta Business Contract Attorney is essential in arguing to have the non-compete contract case dismissed thereby allowing the employee to continue to working.

Under Georgia law, many non-compete and non-solicitation contracts are found to be unenforceable for the simple reason that they are too broad in scope. For non-competition agreements, if only one clause in the agreement is found to be unenforceable then the entire agreement is invalid. When non-competition and non-solicitation agreements are properly written, they are key in protecting a company’s interests when employees leave. However, to guarantee that these written agreements are enforceable, companies must include restrictive provisions that are reasonable under Georgia employment law. Georgia has well-founded public policies that protect against restraints on trade, so any company using a non-competition or non-solicitation agreement needs to make the contract sufficiently narrow to be enforceable. In all Georgia non-compete lawsuits, three primary questions are asked and scrutinized by the Georgia courts in the following manner:

One: Is the scope of the duties of the employee substantially similar to the duties the employee undertook in his or her previous employment? Two: Is the time-period for which the former employee is prevented from competing short enough to be considered reasonable? In most cases, a two-year time-period in which a former employee cannot compete with his former employer is the outer time limit a Georgia court will hold enforceable. Third: are the restrictions on the geographic region in which the employee is prevented from working sufficiently narrow and effectively predetermined for the non-competition agreement to be held enforceable by a Georgia court?

Non-solicitation agreements are also a restraint on trade and undermine competition among Georgia businesses, and therefore heavily scrutinized by Georgia courts. However, as a general rule they are held enforceable by Georgia courts much more often than non-competition clauses. Non-solicitation clauses prevent a former employee from taking clients away from his former employer. Actions by a former employee that would be grounds for a Georgia court to order and injunction due to a non-solicitation agreement would be the use of his or her former employer’s client list to contact clients of the former employer and solicit their business over to his or her new employer.

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July 3, 2010

GEORGIA EMPLOYMENT AGREEMENT DISPUTES, LITIGATION, AND RESOLUTION – UPFRONT DILIGENCE IS THE KEY TO AVOIDING LONG TERM PROBLEMS

As an Atlanta employment dispute attorney, I am quite sure I speak for most persons when I say that looking for employment is exceedingly stressful. Moreover, when an offer of employment finally comes in from an employer, it can be a whirlwind experience. Because the hiring process can be rushed for both the new employee and the company, many Georgia employment agreements are entered into without giving sufficient consideration to key factors. Unfortunately, not paying attention to the details of an employment agreement up front can be a big mistake in the long run.

In my Atlanta, Georgia Business Law firm, I have counseled clients on both sides of the table regarding Georgia employment agreement disputes. Oftentimes, these cases hinge on the circumstances under which the employment agreement was signed. When an employment disagreement arises, Georgia courts likely will take into consideration many factors surrounding the signing of an employment agreement. This is especially true concerning whether the employee was presented with the agreement before employment actually began. If an employer gives the employee an employment agreement before employment begins as well as ample time to review the agreement and consider the implications of signing, then it is more likely that the court will favor the employer and enforce the signed contract. The terms of employment should be presented before work begins and supplying the employee with a comprehensive contract will allow for fair “arm’s length” negotiations between parties.

Before signing any employment contract it is always wise to ask a Georgia Business Employment Contract Attorney to review the terms and conditions of the agreement. An experienced contract lawyer will be able to spot potential issues or areas that are lacking in the contract that might become a problem in the future. It is even more critical for an employee to retain a Georgia employment contract attorney if asked to sign an employment agreement after work has already begun. The courts do not typically tolerate this type of approach by companies, especially if the terms set out are not favorable for the employee. Examples are if the contract presented spells out a reduction in employee benefits or a change in remuneration.

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