Restrictive covenants can bring up many diverse opinions due to several sides of the issue. Do you believe in the employer's legitimate interests, an employee's right to earn a living, free trade, business competition, protection of business information, training and customer relationships? And that is only a few of many perspectives.
Historically, the state of Georgia has taken an all or nothing enforcement approach or strict scrutiny. However, after the November 2010 elections, Georgia has adopted a new constitutional amendment making the state friendlier to employers.
The stated purpose of the new Act is to "bring Georgia in line with the overwhelming majority of other states and to establish a rule of reasonableness and legal analysis of these arguments". The major goals are to decrease the amount of litigation, provide more predictable enforcements and give employers greater protection.
There are many new changes and updates to the restrictive covenant laws. Now courts are permitted to modify individual provisions. Also, information can now remain protected as long as it stays confidential or a trade secret.
So, the real question is how do you set up restrictive covenants with employees and what type of restrictions are necessary for different employees. Taking a tiered approach is the most productive and practical method. Below is an example of a successful tiered restrictive covenant program.
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Group A: No competitive threat; secretaries and administrative personnel. Form non-disclosure and non-interference with employees.
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Group B: Worried about soliciting customers but not worried about competitive harm. Form non-disclosure, non-interference with employees and non-solicitation.
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Group C: Worried about competitive harm. Tailored non-compete combined with non-solicit and non-disclosure.
For more information on the new restrictive covenant laws or how the tiered approach, call 770.248.0401 today.
