The laws in Georgia related to restrictive covenants in employment agreements are complicated and nuanced. For example, although Georgia legislation addressed client-customer non-solicitation, it only recently answered questions about pirating of employees in 2017.
If you are an employer who wants to make sure a departing employee does not recruit your workforce or steal your clients, talk to a skilled attorney at Sparks Law. One of our Georgia non-solicitation agreements lawyers can review your existing employment contracts or draft new ones that suit your business needs.
There are four basic restrictive covenants that are usually presented to employees in Georgia upon hiring. These can be separate documents or woven into a comprehensive employment agreement. The covenants are for:
Importantly, the way Georgia treats restrictive covenants changed for contracts drafted after May 2011. Although the legislation addressed non-compete, non-disclosure, and non-solicitation of customers, it left non-solicitation of employees to common law until a 2017 decision by the Georgia Court of Appeals Fourth Division. A knowledgeable local attorney can further explain how this decision impacts future non-solicitation agreements.
Under current Georgia law, former employees cannot solicit or even passively accept business from their former employer’s customers if they had prior material contact. Before 2011, the courts would have struck down this covenant in favor of the employee. Now, the court considers this restriction reasonable if the non-solicitation clause lasts no more than two years.
A seasoned attorney at our firm can develop a set of restrictive covenants for your business that clearly addresses non-solicitation and is compliant with current Georgia law.
Also called non-recruitment or pirating, non-solicitation of employees is a type of covenant that prevents a departing employee from trying to convince other employees to leave as well.
In CMGRP, Inc. v. Gallant, No. A17A1168 (Ga. Ct. App. Oct. 4, 2017), CMGRP had established a non-solicitation clause prohibiting a former employee from recruiting any employee of the company for one year. The lower court struck the restrictive covenant down, ruling in favor of the employee. The reasoning was that the covenant was not limited to a geographic area and did not specify that the former employee was limited to non-solicitation of only those employees known to the former employee.
The Georgia Appeals Court reviewed the lower court’s decision and reversed it. Employers and their attorneys now rely on this ruling to create covenants that restrict employee recruitment to all employees, not just those a former employer knew or had contact with. The Court also affirmed that a geographic limitation is not necessary for a non-recruitment clause to be enforceable.
It is important to remember that this decision is precedent, not legislation. When drafting non-solicitation clauses, our attorneys take into account the different holdings issued by other Georgia appeals courts. If you are a business owner who wishes to draft a non-solicitation agreement or covenants for comprehensive employment agreements, contact a well-researched attorney at our Georgia office.
Employers should try to create a positive work environment and a smooth transition when employees leave the company. To accomplish this, a good practice is to ensure that employees know from the start what is expected of them and what they will be restricted from doing upon terminating employment. For a successful transition, it is crucial to have an employment agreement with restrictive covenants for soliciting customers and employees.
If you are a business owner with employees, talk to a Georgia non-solicitation agreements lawyer at Sparks Law. One of our skilled team members can sit down with you and thoroughly review your contracts. If you need new or revised contracts, we are here to help. Call for your initial consultation.
