Non-Competition and Non-Solicitation Agreements
More than ever, employers in Georgia are taking advantage of recent changes in the law that favor limiting an employee’s ability to work in similar jobs once their employment ends. When taking a job, employees are often required to sign numerous documents, many of which get little or no attention in the excitement of a new employment opportunity. These documents can include agreements with the company on policies or procedures, confidentiality and, increasingly, non-competition agreements (also called “covenants not to compete”) and non-solicitation agreements. These “non-compete” and “non-solicit” agreements are collectively called “restrictive covenants” and they can have the effect of limiting or preventing an employee from working in the same or even a similar job or career well after their employment ends with the company.
Non-compete agreements typically prevent employees from working, directly or indirectly, in competition with their former employer. These provisions are often drafted so broadly as to encompass jobs that may have nothing to do with the work done for the former employer as long as the work is for a company that competes in some manner with that employer.
Non-solicit agreements generally prevent an employee from encouraging employees or customers to stop working or doing business with the former employer. These agreements may even apply to employees or customers with whom there was no previous contact.
Non-compete and non-solicit agreements can vary in scope. For instance, an employer can establish a time period of a few months to a few years during which a former employee cannot work for a competing business or solicit employees or customers. An employer may also restrict the physical area in which a former employee can work for a similar business, anywhere from a few miles to worldwide. It is very important for employees to understand the scope of these agreements and to consider how signing such an agreement might affect their careers upon leaving the company. It is important to know that these agreements are enforceable. Should a company go too far in restricting an employee’s right to work, the trend is for courts to modify the agreement – something called blue penciling – not throw them out altogether.
If you have ever signed one of these agreements and act in violation of it, your former employer could sue you. The company could seek damages for lost business, prevent you from working for your new employer, or even collect the profits from your own company if you have chosen to start a similar or competing business.
Because these agreements can have serious effects on your ability to work and be successful in your field, you should carefully inspect any documents that your employer asks you to sign. If your employer requires you to sign one of these, you may want to seek legal advice. To further discuss your situation, you can call us toll free at 1-855-774-3675, send us an e-mail, or fill out a consultation request form and we will contact you as soon as possible.