Your business is driven by many factors, including trade secrets, loyal customers, knowledgeable employees, and proprietary technology. Losing any of those assets to competitors could devastate your company. One way to stop departing employees from sharing your sensitive information with new employers is to require them to sign an agreement known as a non-compete.
With help from a skilled attorney at Sparks Law, you could prevent former employees from working for your direct competitors. However, these restrictions also must be fair to employees who need to work. To ensure the restraints you place on your employees are legal, consult an Atlanta non-compete agreement lawyer.
Non-compete agreements are contracts that limit how far away an employee must go to look for another job and how long an employee must wait to work for a competitor. Employers typically ask new employees to sign non-compete agreements before they are exposed to confidential information. However, an employee can be required to sign at any time during their employment, right up until the last day.
Importantly, contracts are unenforceable if only one party receives a benefit from them. A valid contract requires that all parties provide consideration, which means both the employer and employee give something valuable up to gain something else. Typically, employees signing non-compete agreements give up the right to work for some other employers, but they are offered a job if they sign it. The employer gives up money in the form of wages when the employee is hired after signing the agreement. A company owner should consult a seasoned attorney at our Atlanta office to ensure their non-compete agreements are valid.
Employees typically dislike signing non-compete agreements, as they make it more challenging to find suitable jobs near their homes. The Georgia courts mitigated these concerns in 2011 by enacting the Blue Pencil Rule, which applies to all agreements containing restrictive language.
The Blue Pencil Rule is a legal standard that permits judges to cross out or modify portions of contracts that are unenforceable due to being overbroad or unfair. The rest of the contract will stand as long as the spirit of the agreement is left intact. For instance, judges would Blue Pencil a provision in which an employee is geographically restricted to job-hunting outside the Southeast U.S. The restriction could be modified to a reasonable area, such as a five-mile radius.
If an employer can prove to the Georgia court that a non-compete agreement protects a legitimate interest and sets reasonable restrictions, they will usually win the employment dispute. Legitimate business interests typically arise in cases where the employee has specialized skills and was integral to the business’s inner workings. For example, a scientist participating in the late-stage research of a cancer-fighting drug is much more likely to be more restricted than someone on the lab’s cleaning crew.
Employees who violate non-compete agreements will usually be subject to court injunctions, which immediately prevent them from continuing to compete. If the employee has any confidential company information, the court will insist it be destroyed or returned. The court can also force the employee to quit a competing job. The court will then set a hearing where the parties explain their sides of the story.
If an employer can prove losses stemming from the employee’s breach, the courts could require the employee to pay damages. If new employers entice employees to work for competing companies and profit from knowledge the new employee brings to the job, the former employer may recover damages from the new employer. A persistent attorney at Sparks Law could help Atlanta employers enforce their non-compete agreements if these situations arise.
Sometimes, unscrupulous employees leave your operations and take a job with one of your competitors, eager to share your confidential information or apply the skills they learned from you. When this happens, you have legal options for protecting your company and hard work.
An Atlanta non-compete agreement lawyer could draft or review contracts to restrict employees from hurting your business. Call the legal team at Sparks Law today to learn more about what we can do for you.