Articles Posted in EMPLOYMENT CONTRACTS & AGREEMENTS

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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As an Atlanta, Georgia, business dispute and agreement lawyer, I know there are many important considerations concerning the signing of any employment agreement. This is true for both the employee and employer alike. Much of what is factored in to any Georgia Court’s decision will be the facts and circumstances surrounding the signing of the Georgia business agreement. As an Atlanta, Georgia business contract lawyer, I often will defend cases based on these circumstances. For instance, if the employer set matters forth concerning the employer-employee agreement to the employee before he or she was hired, gave the employee time to consider these matters, and review the business contract, then it is much more likely that a Georgia Court will hold this business contract enforceable against the employee.

The legal reasoning is, that if the employee had the time to read the document, have a Georgia business contract lawyer review the contract and advise her or him on matters, and consider the all the pertinent clauses as part of the consideration of whether to accept the employment position, then the employee had the opportunity to bargain for his or her employment terms. In contrast, if your employer requests or demands you sign any business agreement after your employment, the Georgia Courts will likely look at this as a coercive tactic not bargained for with your employment. In such instances, a smart employer with offer some consideration besides “implied” or “actual” continued employment. On such example would be coupling the signing of a Georgia business contract with a salary change or restructured benefits.

If your employer requires you sign a Georgia business agreement concerning your employment, you should play it safe and retain an Atlanta business lawyer to review this agreement and advise you concerning the consequences of your decision. In contrast, if you are an employer, and you feel that your employees should be bound by the terms of any business agreement. You should have a Georgia Business attorney or a Georgia business law firm to carefully craft your Georgia business contracts or review the ones you presently have to see if they are enforceable.
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As an Atlanta, Georgia business contract lawyer, I often see clients who are threatened with a lawsuit seeking to stop them from competing with their former employer. I also see many “former employees” of these employers who are surprised to find that in many instances, these non-competition (“non-compete”) contract, provisions and clauses can and will be enforced. Nevertheless, whether they will be enforced by a Georgia Court, depends on many different factors. In deciding whether to enforce a “non-compete” agreement, Georgia Courts must find that the non-competition provisions of the employee’s contract were “reasonable” in the following areas:

1. Geography – As a Georgia non-competition attorney who has business clients who are both employee and employer, the competition must be restricted to a reasonable geographic area. What is “reasonable” depends on the area of work involved, the demographics of the area, and many other factors.

2. Time Period – To be enforceable, a Georgia non-compete agreement must be reasonable in the scope of time it restricts an employee from working. This largely depends on the type of work, the frequency of the type of employment which occurs in the demographic area, and many other factors. As an Atlanta business contract attorney, I am seeing that more and more employers try and push the outer limits of a time period for a former employee to work in a competitive field. As a general rule, two years is about the maximum amount of time a former employee can be restricted from working. More common, is a one year restriction from competing.
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As an Atlanta, Georgia business contract lawyer, I am seeing more and more disputes and litigation concerning non-competition agreements (often referred to as “non-compete agreements”) and non-solicitation agreements. The underlying reason I am hearing from my Georgia business clients is that they are being sued because there is only a limited amount of Georgia business in Atlanta, Georgia. This is especially true in with the densely populated metro Atlanta areas. In contrast, many of my Georgia business clients are suing because they feel there is not enough business to go around in these difficult times and they need to protect themselves from unfair competition and the “stealing” of their clients. Much of the reasoning behind these Georgia non-competition (“non-compete”) and non-solicitation lawsuits, and reasons to enforce them or bring them, is that there is a general lack of Georgia consumer business in the Metro Atlanta, Georgia area.

If your employer has requested you sign a Georgia non-competition agreement or Georgia non-solicitation agreement, you should retain a Georgia business contract lawyer to review, give advice and negotiate the terms of your employment. Should you However, if you are being sued for breach of such an agreement, you should immediately seek Georgia business counsel to defend you against such a law suit. Or, if you are an employer, and you feel that your employee has left and is unfairly competing against your company and which to enforce the Georgia business agreement, you need a GA law firm who specializes in Georgia business law and Georgia business contracts.
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