In most cases, employers strive to create nurturing environments for employees so that they are happy and productive at work. Most of the time, departing employees leave a company on good terms. However, it is not always possible to maintain the peace. Departing employees can intentionally or unintentionally harm your business in various ways.
Luckily, you can mitigate the damage a former employee can do by drafting agreements with help from a skilled attorney. An Atlanta restrictive covenants lawyer at Sparks Law can explain how to protect your business using specific terms in your employment agreements or other contracts.
The Georgia Legislature and courts have tried to strike a delicate balance between protecting the competing rights of employers and former employees. Georgia residents have a right to seek suitable work near their homes, and employers have a right not to be harmed by former employees’ actions.
There are specific ways that employers may restrict their former and current employees. The four major restrictive covenants include:
In a continued effort to ensure restrictive covenants are fair, Georgia abides by the Blue Pencil Rule. If a section of an agreement is unfair or overbroad, judges can strike it or rewrite it according to current statutes or case law. An experienced attorney at our Atlanta office could draft or review restrictive covenants and help ensure that they will not be struck down in the future.
When an employee learns specific skills at a company, non-competition agreements limit their future employment choices when they leave that company. The premise is the new employer should not unduly benefit after a former employer invests time and money into training the employee. To be legal, both parties must give up something of value to gain something else valuable. This mutual exchange for value is called consideration. The employee gives up the right to work for competitors but may gain a special payment or letter of recommendation for doing so.
Non-competition agreements usually limit the employee from working in a specific geographic area for a limited amount of time. The restrictions must be reasonable and allow employees to find jobs in their fields.
Proprietary information is often key to a business’s success. If employees divulge trade secrets to competitors, it could seriously hurt the company. To prevent this, employers should require employees to sign non-disclosure agreements (NDAs). A skilled lawyer can help draft these contracts with the proper restrictive covenants.
Georgia has a history of accepting non-solicitation clauses concerning employees who have had material contact with an employer’s customers. Material contact is considered contact with a customer on an employer’s behalf, such as an employee on the sales staff. However, these contracts must delineate a reasonable time limit, generally two years.
The Georgia Court of Appeals set precedence when it ruled on a non-solicitation case in 2017. The trial court in CMGRP, Inc. v. Gallant, No. A17A1168 (Ga. Ct. App. Oct. 4, 2017) refused to uphold a non-solicitation agreement because it did not define a geographic area for non-solicitation, and it broadly forbade employees from soliciting all other employees, not just the ones known to them.
The Appeals Court reversed the trial court’s opinion, backing employers who wish to completely restrict their former employees from recruiting coworkers. The Appeals Court also ruled that the geographic restriction is not relevant. However, this ruling has not been codified under Georgia law, so employers should consult a local attorney to further discuss how the courts may view a particular restrictive covenant.
Some great employees may leave your business for other opportunities, and you wish them well. Some may go because they were not a good fit for your company’s goals. Regardless of the reason, you do not want employees saying or doing anything to hurt your business when they leave.
If you have employees, work with an Atlanta restrictive covenants to draft contracts and protect your company. Call the legal team at Sparks Law today to schedule your initial consultation.