Key Takeaways

  • A non compete agreement in Georgia is a type of restrictive covenant that limits where, when, and how a former employee or contractor can compete with an employer.
  • Georgia law enforces non-compete agreements only if they meet statutory requirements for reasonableness, including duration, geographic area, and scope of restricted activities.
  • The 2011 Georgia Restrictive Covenants Act expanded enforceability for certain employees and allowed courts to modify overbroad provisions.
  • Non-compete agreements differ from non-solicitation and confidentiality clauses, and each protects different business interests.
  • Employers must identify legitimate business interests—like trade secrets, customer relationships, and specialized training—to enforce a non-compete.

Non compete Georgia refers to the state laws that govern non-compete agreements. This type of agreement is typically used to prevent a former employee from working for a competitor or starting his or her own business in the same industry. An individual could breach a non-compete agreement even if he or she does not take any customers from his or her former employer. This protects the time and money the business invests in its employees.

Restrictive Covenants

Restrictive covenants are the four common provisions included in a Georgia non-compete agreement:

  • Non-compete provision
  • Non-solicitation of customers protects the time and money spent building customer relationships and keeps the employee who is leaving from soliciting customers for his or her new business.
  • Confidentiality and non-disclosure keep a former employee from revealing trade secrets or other proprietary information.
  • Non-solicitation of employees, also called anti-raiding or no-hire provisions, prevent an employee who is leaving for a competitor to encourage other employees to do the same.

Georgia courts will distinguish between these provisions when hearing a case involving a non-compete agreement. For example, a non-solicitation provision does not necessarily keep a former employee from leaving to work for a competitor provided he or she doesn't poach the former employer's customers.

The court will examine scope of prohibited activity, geographic coverage, and length of time to determine whether the restrictive covenants of the agreement are reasonable.

Types of Restrictive Covenants in Georgia

In Georgia, non-compete agreements are one of several restrictive covenants that can be included in employment or contractor agreements. The most common types include:

  • Non-Compete Agreements: Prevent former employees or contractors from working for a direct competitor or starting a competing business within a specified geographic area and time frame.
  • Non-Solicitation of Customers: Prohibits a former employee from contacting the employer’s clients or customers with the intent to divert their business.
  • Non-Solicitation of Employees (Anti-Raiding Clauses): Restricts a former employee from encouraging current employees to leave the company.
  • Confidentiality/Non-Disclosure Agreements: Focus on protecting sensitive company information like trade secrets, pricing structures, or proprietary methods.

Georgia courts distinguish between these covenants. For example, violating a non-compete could occur simply by working for a competitor, while a non-solicitation clause typically only prevents targeting former customers.

Covenant Requirements

The court requires that a non-compete covenant must protect business interests while remaining reasonable. In general, to be legally enforced a covenant must meet these three requirements.

  • Consideration, which means that the employee receives something of value in exchange for agreeing to the contract terms. This could be the job itself, a salary increase, or some other benefit. The promise of keeping one's job is not sufficient consideration, so employers must be careful when requiring current employees to sign a non-compete.
  • The agreement must be specific in protecting proprietary information, trade secrets, or another actual business interest.
  • The agreement must be reasonable in scope, geography, and duration.

Enforceability of Non Compete Agreement Georgia

To be enforceable, a non-compete agreement in Georgia must satisfy three main factors:

  1. Legitimate Business Interest: The employer must demonstrate the agreement protects specific interests, such as:
    • Trade secrets and proprietary information
    • Established customer relationships
    • Specialized employee training or unique skills developed through the employer
  2. Reasonableness: The agreement’s:
    • Duration is typically enforceable for six months to two years, with one year considered common.
    • Geographic Scope must be limited to areas where the employer actively does business. Statewide or nationwide restrictions are scrutinized unless justified.
    • Scope of Activity must relate to the employee’s actual duties or role. Overbroad restrictions can be narrowed by Georgia courts under the Restrictive Covenants Act.
  3. Compliance with Georgia Statute: The 2011 law allows “blue penciling,” meaning courts may modify rather than void overbroad agreements.

Amendment to Georgia Non-Compete Laws

A 2010 amendment substantially changed the non-compete laws in Georgia and applies to agreements made since May 11, 2011. The new laws tend to favor the interests of the employer rather than those of the employee.

The new law provides more flexibility to employers when determining the extent of restricted territory. It also clarifies two years or less as a reasonable time constraint and considers longer non-compete agreements to be unreasonable.

While the old law required a narrow scope of prohibited activity, under the new law employers can restrict any "good faith estimate" of activities and geographic locations.

The court can also now modify, or "blue-pencil," covenants that are too restrictive under the guidelines above. The modification should realize the agreement's original intent while protecting each party's interests. This new law makes it much easier for employers to enforce restrictive covenants in court, though some agreements are still deemed invalid.

However, it's not clear whether courts are allowed simply to strike overly restrictive covenants or whether they can also add new provisions in place.

Under both the old and new laws, an employee can be fired for refusing to sign a non-compete agreement. That's because Georgia is an at-will employment state.

Impact of the 2011 Georgia Restrictive Covenants Act

The 2011 Georgia Restrictive Covenants Act significantly changed the enforceability of non-compete agreements. Key updates include:

  • Court Authority to Modify: Judges may revise overbroad non-compete clauses instead of voiding the entire agreement.
  • Expanded Coverage: Employers can now enforce non-competes against more categories of workers, including key employees and independent contractors, not just executives.
  • Predictable Enforcement: The law provides clearer standards for time limits, geographic ranges, and activity restrictions, making agreements easier to uphold in court.

For agreements signed before May 11, 2011, the old, stricter rules still apply, and overly broad covenants remain void in their entirety.

Who Can Be Required to Sign a Non-Compete Agreement?

Georgia's non-compete amendment is unclear about which employees can be required to sign a non-compete. A 2017 case, CSM Bakery Solutions vs. Debus, involved an employee whose non-compete agreement was dissolved by the court because of her job category. The court found that:

  • The defendant did not act in a sales capacity at CSM.
  • No sales records or commission sheets were on file for Debus, so no evidence existed that she made sales, solicited customers, or otherwise acted as a salesperson.
  • The agreement was too broad because it would apply to anyone who positively affected sales for a company regardless of their specific job duties.
  • Debus could not be defined as a "key employee" at this global corporation since her job was relatively low-level among the thousands of employees in several international locations.

Employees and Situations Where Non-Competes Apply

Under Georgia law, non-compete agreements are typically enforceable against:

  • Executives and Key Employees: Individuals who have decision-making authority, access to trade secrets, or the ability to influence customers.
  • Independent Contractors in Specialized Roles: Contractors performing highly specialized work for the employer.
  • Employees with Access to Sensitive Information: Sales representatives, engineers, or managers who handle proprietary information or client relationships.

Courts rarely enforce non-competes for low-level employees or those without access to confidential data. Employers must show that enforcing the agreement is necessary to protect a legitimate business interest.

Frequently Asked Questions

1. Are non-compete agreements enforceable in Georgia? Yes, if they protect a legitimate business interest, are reasonable in time and geography, and comply with the 2011 Restrictive Covenants Act.

2. How long can a non-compete last in Georgia? Most enforceable non-competes last six months to two years, with one year being typical.

3. Can a Georgia court modify an overbroad non-compete? Yes, under the 2011 law, courts can “blue pencil” or revise overly broad terms instead of voiding the agreement.

4. Who can be required to sign a non-compete? Executives, key employees, and independent contractors with access to confidential information or customers may be required to sign.

5. What’s the difference between a non-compete and non-solicitation agreement? A non-compete bars working for a competitor, while a non-solicitation agreement prevents contacting or poaching the employer’s customers or employees.

If you need help with a Georgia non-compete agreement, you can post your legal need on UpCounsel's marketplace. UpCounsel accepts only the top 5 percent of lawyers to its site. Lawyers on UpCounsel come from law schools such as Harvard Law and Yale Law and average 14 years of legal experience, including work with or on behalf of companies like Google, Menlo Ventures, and Airbnb.