Competition bans have been the subject of much controversy in recent years. Some consider the existence of a non-compete clause to be a violation of a worker`s ability to find employment on the open market. However, for the employer, non-competitive agreements may be essential to protect the employer`s confidential information. In many states, courts have limited the applicability of non-competition agreements. Georgia is considered an employer-friendly state, but non-competition bans can still be found if they do not meet certain legal requirements. A non-compete agreement (also known as „Covenant to Not Compete“ or „CNC“) is a contract between the company and its employees (usually their employees) that prevents the agent from becoming a competitor to the company/employer.  Sci. Games Int`l, Inc. v. Cash, 2:16-CV-00142-WCO, 2017 WL 542034, at `6 (N.D. Ga. 25 Jan 2017) (from the former participation collaborator, although he honoured the non-competition agreement because „the amount of information he took was overwhelming, and he had the potential to cause serious damage“).
Summary: With effect from May 2011, Georgia`s Restrictive Alliances Act (CAR) constituted a major change in existing Georgian legislation. Since then, however, very few courts have interpreted the CAR, so employers and practitioners are also wondering how and under what circumstances restrictive agreements can be used to protect an employer`s legitimate business interests.  One of the few statute interpretation decisions, CSM Bakery Solutions, LLC v. Debus (N.D. Ga. 2017), highlights the reality that some employees in Georgia are simply immune to post-employment non-competition provisions – even though the agreements are tailored in terms of duration, geographic proximity and scope of excluded activity. If a staff member does not enter one of these specific categories, the non-compete agreement would no longer be applicable after the employee is dismissed. The new law allows employers to define on the whole the types of activities they consider to be competitive. A: Yes, continued employment is generally considered sufficient for a non-compete clause in Georgia. Our firm represents companies, executives, former employees, physicians and other health care professionals in disputes involving non-competition rules, non-demand agreements and confidentiality. If you are in conflict with a non-compete agreement, our company can help you.
We have extensive experience, representing both employers and workers in litigation through restrictive alliances. In its submissions, the Tribunal first stated that non-competition prohibitions would only apply in Georgia if they were proportionate to the duration, geographic proximity and scope of activities.