Are noncompete agreements valid in Georgia?

Alex B. Kaufman - Business Litigation - Super Lawyers

Answered by: Alex B. Kaufman

Kaufman & Forman, P.C.
Atlanta, GA
Phone: 770-390-9200
Fax: 770-395-6720

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Noncompetes are agreements generally used by employers to keep their employees from leaving and competing against their past employer, whether in the form of starting their own company or working for a direct competitor. They are common in certain fields. However, whether employees sign them and whether they are enforceable are two different questions.

Georgia is a unique state with regard to the enforceability of noncompete agreements: Before 2010, noncompetes were invalid in the vast majority of cases. After the state passed legislation in 2010, there is a much broader range of acceptable noncompete agreements.

Before 2010: Georgia law does not favor noncompete agreements

In the past, Georgia law made noncompetes very hard to enforce. This is because the law, and therefore the courts, considered noncompetes overly restrictive. Courts would closely scrutinize agreements like these, and any inconsistency could render the entire employee agreement invalid.

Post 2010: The courts open the possibility of modifying noncompete agreements

The Restrictive Covenant Act, passed in 2010, makes it easier to enforce noncompete agreements. The law makes it easier not by changing the underlying legal restrictions, but by allowing the modification of noncompetes. The court can amend the agreement in one of two ways:

  1. The court can cut out certain overly restrictive elements of the agreement and allow the rest to proceed. Previously, any overly restrictive component would render the entire agreement invalid.
  2. The court can rewrite the agreement altogether, adding or revising the clauses to make it enforceable.

This possibility of rewriting agreements is unlike many other states.

Georgia law’s overall opinion on noncompete agreements

Noncompete agreements, though easier to enforce than they used to be, are still uniquely regarded by Georgia law. It is important to note that how the court views a noncompete agreement depends on when it was signed. If it was signed before the passage of the new law in 2010, it would be subject to the old law, and if it was signed after 2010, it would be subject to the new law. Therefore, if you are facing an issue with a noncompete agreement, it is crucial to speak with a lawyer with experience in both the old style of approaching noncompetes and the new style.

Disclaimer: The answer is intended to be for informational purposes only. It should not be relied on as legal advice, nor construed as a form of attorney-client relationship.

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