As an entrepreneur, you invest a significant amount of time training employees and developing relationships between them and your most valuable vendors and clients. You also indoctrinate them into the methods, technology, and approach that sets your company apart from the competition. Naturally, with the right support, your best employees will outgrow their current roles, and look to move up. Hopefully, that move is internal, and the employee is retained. However, what if it’s not? Can you prevent your former employees from using the tools you given them to harm your business? With a bit of planning, at least in Georgia, the answer is yes.
Regardless of the industry, every entrepreneur devotes significant resources into developing its employees, its brand, and its customer base. In 2011, Georgia’s constitution was amended to authorize legislation that simplified and clarified an employer’s ability to protect these interests from former employees. To that end, Georgia’s code now authorizes employers to require certain employees to sign agreements prohibiting them from competing with or soliciting customers of the employer following the termination. Further, the employer does not need to pay the employee in exchange for the agreement: it may simply condition continued employment upon the employee’s willingness to sign.
It is important to note that Georgia’s code does not permit post-employment restrictions on every employee. Generally, only key employees or employees that are customer-facing may be restricted. Additionally, the agreements must be drafted with reasonable limitations on the amount of time the employee is restricted from competing following termination, the geographic area in which the employee is restricted from competing, and the scope of activities that constitute “competition.” Further, the agreement can only prevent former employees from soliciting certain classes of customers. Every position in every company is unique, so drafting an enforceable agreement requires consideration of both Georgia’s statutory requirements and the specifics of the employee’s role.
No mentor wants to hold a protégé back. However, you probably at least want to avoid training a future competitor. However, if you wait until your employee leaves, there is little that can be done. Therefore, you should seek the guidance of an employment law attorney to help set up employment agreements that will prevent your most valuable employees from leveraging your resources to compete with you in the future. Additionally, if you currently have key employees who signed agreements prior to 2012, it is advisable to replace those agreements with updated versions to take advantage of the 2011 amendment.
About the Author: I am an associate attorney with Briskin, Cross, and Sanford, LLC. I focus my practice on representing small to mid-sized businesses, as well as executive employees. I have considerable experience helping my clients with drafting and enforcing non-competition agreements. If you are interested in a free consultation as to whether I can help your business implement enforceable non-competition agreements, I can be reached at 770-410-1555 or [email protected].