Georgia Voters Protect Employers Through Constitutional Amendment

In November 2010, Georgia voters voted overwhelming (by 68%!) to amend Georgia’s Constitution, a change that rewrites the laws governing employee non-compete and restrictive covenant agreements.

In the past, the enforceability of employee non-compete agreements bordered on laughable. Unless such a non-compete neatly fit within Georgia’s morass of technical case law, it would be completely thrown out. Employers therefore had much difficulty protecting their confidential information and other intellectual property from transient employees. As cloud computing, smart phones, and social media have exponentially accelerated the transfer of information and erased geographic boundaries, the laws protecting a business’s IP were left in the dust.

Under the new statutory regime, however, Georgia voters have thrown employers a lifeline. Most importantly, Georgia courts may now modify what would have otherwise been an overbroad – and unenforceable – provision. Previously, Georgia judges had no discretion to modify, sever or “blue pencil” restrictive covenants in employment agreements. It was all or nothing.

So is this really a big deal for your company? Absolutely. Because the new laws provide Georgia courts much greater flexibility in enforcing non-compete and other restrictive covenant provisions in employment agreements, employers have much greater protection.

The catch, however, is this – the new law only applies to agreements signed after the May 1, 2011 election. All non-competes and confidentiality agreements executed beforehand will continue to be governed by old case law. Thus, to reap the benefits of the new law, you must either amend your old agreements or have your employees sign new ones.

If you are interested in learning more about how the new statutory framework can better protect your company’s intellectual property, please contact the attorneys at Shepherd Law to discuss.