We get asked this all the time, and like most legal answers, “it depends.” What does it depend on? A bunch of factors such as:
Oftentimes, we can be good lawyers and find a tight spot to wedge a solid legal argument into, and effectively get you out of it. Depending on the collage of answers you gave to the above questions, we can go over your situation and come up with a solid legal strategy for you.
Believe it or not, every situation is unique. Sometimes, you have a very well-written non-compete agreement that’s totally enforceable, BUT the business owner isn’t the type of person to really “take it to the mat” and try and enforce it. Or maybe the employer IS the type that would sue, at the drop of a hat, but there were weird circumstances—maybe the employee they’d sue has a good case for wrongful termination or being discriminated against or harassed in some way. So, the employer could sue and probably win on the non-compete claim but would open themselves up (poking the bear, so to speak) to liability for a counter-suit for discriminatory firing. Then, you have the reverse situation, where you have a sort of trigger-happy employer that loves to sue people, but has a terribly written non-compete agreement. This is a strange case as well, because technically the employee has the winning case, but it would cost the employee a solid $30,000 to prove their innocence! Typically, employers have more resources than employees, and that mismatch (financially) is a major factor that we’d need to review and strategize around.
Sometimes, setting up a sort of ghost LLC helps, too. What are Ghost LLCs? When you set up a company (the right way) you need a document that lists out who owns the company. Some (but not all) states require that this information be publicly filed, such that anyone with an internet connection can find out the intimate details about who owns what companies. Georgia does not require this, which allows for what I’d call a “Ghost LLC.” Let’s say that you really want to enter into a contract with a company, but you want the contract to just be between yourself and that company (not public information). You could simply hire a good attorney (pick me! LOL) to set up an LLC for you and keep the fact that you’re the owner a “secret.” The attorney setting it up has to list their name as the “organizer” which just means that’s the person that registered the company, and the attorney can serve as the company’s “Registered Agent,” which you should be doing anyway, no one can distinguish that company from the hundreds of other companies this theoretical attorney set up! Yes, if someone were to sue the Ghost Company, it would likely come out who owns it, but they’d have to know which company to sue in the first place! And, they’d have to spend the (circa $20,000) it would take to sue the company as well, and most business owners would just eat their losses and move on.
Additionally, if you’re effectively in breach of a prior agreement with your employer, well, it’s breaching civil law, and as they say “it’s a free country” But seriously, there’s no criminal liability for breaching a contract you made with a business (not yet, at least). In my experience, judges really don’t like non-competes anyway, so if you give them a nice way to not rule against you, they often rule in your favor!
If it weren’t obvious, don’t go and list your (secret) LLC on your LinkedIn profile, though, that’d kind of be shooting yourself in the foot!
If you OWN A BUSINESS and you want to prevent employees from doing this sort of thing, we have ways to draft amazing contracts that do that as well (we’ve worked on both sides of the table). Anyway, if you are in a spot like this feel free to give us a call, our experienced Georgia business attorneys would be happy to help!