Articles Posted in EMPLOYMENT LAW

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In my law practice as an ATL Business Lawyer handling employment contracts, I have noticed a sharp increase in Georgia employment contract litigation/lawsuits regarding non-competition and non-solicitation clauses in Georgia employment contracts. It is my opinion that the weak US economy is responsible for the sharp increase in Georgia employment contract litigation. While I believe the US economy shows some signs if improvement, many Georgia companies continue to struggle to make sales forecasts and hold on to employees. To be more specific, it is my opinion the current tough business environment has caused an increase in the number of disputes and lawsuits that involve non-competition or non-solicitation agreements between former employers and employees. In Georgia, non-competition (commonly known by employment attorneys as Georgia non-compete contracts) and non-solicitation contracts are common in many industries and protect the company from former employees who might otherwise compete directly with the company or solicit business from the company’s clients.

Potential employers can become wary of candidates that they are considering hiring once it is discovered that they signed a Georgia non-compete or non-solicitation agreement at a former company. The fear is that the hiring company may be pulled into a lawsuit filed by the employee’s former company. When a former employee is being sued over a non-compete that is invalid, a qualified Atlanta Business Contract Attorney is essential in arguing to have the non-compete contract case dismissed thereby allowing the employee to continue to working.

Under Georgia law, many non-compete and non-solicitation contracts are found to be unenforceable for the simple reason that they are too broad in scope. For non-competition agreements, if only one clause in the agreement is found to be unenforceable then the entire agreement is invalid. When non-competition and non-solicitation agreements are properly written, they are key in protecting a company’s interests when employees leave. However, to guarantee that these written agreements are enforceable, companies must include restrictive provisions that are reasonable under Georgia employment law. Georgia has well-founded public policies that protect against restraints on trade, so any company using a non-competition or non-solicitation agreement needs to make the contract sufficiently narrow to be enforceable. In all Georgia non-compete lawsuits, three primary questions are asked and scrutinized by the Georgia courts in the following manner:

One: Is the scope of the duties of the employee substantially similar to the duties the employee undertook in his or her previous employment? Two: Is the time-period for which the former employee is prevented from competing short enough to be considered reasonable? In most cases, a two-year time-period in which a former employee cannot compete with his former employer is the outer time limit a Georgia court will hold enforceable. Third: are the restrictions on the geographic region in which the employee is prevented from working sufficiently narrow and effectively predetermined for the non-competition agreement to be held enforceable by a Georgia court?

Non-solicitation agreements are also a restraint on trade and undermine competition among Georgia businesses, and therefore heavily scrutinized by Georgia courts. However, as a general rule they are held enforceable by Georgia courts much more often than non-competition clauses. Non-solicitation clauses prevent a former employee from taking clients away from his former employer. Actions by a former employee that would be grounds for a Georgia court to order and injunction due to a non-solicitation agreement would be the use of his or her former employer’s client list to contact clients of the former employer and solicit their business over to his or her new employer.
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As an Atlanta employment dispute attorney, I am quite sure I speak for most persons when I say that looking for employment is exceedingly stressful. Moreover, when an offer of employment finally comes in from an employer, it can be a whirlwind experience. Because the hiring process can be rushed for both the new employee and the company, many Georgia employment agreements are entered into without giving sufficient consideration to key factors. Unfortunately, not paying attention to the details of an employment agreement up front can be a big mistake in the long run.

In my Atlanta, Georgia Business Law firm, I have counseled clients on both sides of the table regarding Georgia employment agreement disputes. Oftentimes, these cases hinge on the circumstances under which the employment agreement was signed. When an employment disagreement arises, Georgia courts likely will take into consideration many factors surrounding the signing of an employment agreement. This is especially true concerning whether the employee was presented with the agreement before employment actually began. If an employer gives the employee an employment agreement before employment begins as well as ample time to review the agreement and consider the implications of signing, then it is more likely that the court will favor the employer and enforce the signed contract. The terms of employment should be presented before work begins and supplying the employee with a comprehensive contract will allow for fair “arm’s length” negotiations between parties.

Before signing any employment contract it is always wise to ask a Georgia Business Employment Contract Attorney to review the terms and conditions of the agreement. An experienced contract lawyer will be able to spot potential issues or areas that are lacking in the contract that might become a problem in the future. It is even more critical for an employee to retain a Georgia employment contract attorney if asked to sign an employment agreement after work has already begun. The courts do not typically tolerate this type of approach by companies, especially if the terms set out are not favorable for the employee. Examples are if the contract presented spells out a reduction in employee benefits or a change in remuneration.
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As an Atlanta, Georgia, business dispute and agreement lawyer, I know there are many important considerations concerning the signing of any employment agreement. This is true for both the employee and employer alike. Much of what is factored in to any Georgia Court’s decision will be the facts and circumstances surrounding the signing of the Georgia business agreement. As an Atlanta, Georgia business contract lawyer, I often will defend cases based on these circumstances. For instance, if the employer set matters forth concerning the employer-employee agreement to the employee before he or she was hired, gave the employee time to consider these matters, and review the business contract, then it is much more likely that a Georgia Court will hold this business contract enforceable against the employee.

The legal reasoning is, that if the employee had the time to read the document, have a Georgia business contract lawyer review the contract and advise her or him on matters, and consider the all the pertinent clauses as part of the consideration of whether to accept the employment position, then the employee had the opportunity to bargain for his or her employment terms. In contrast, if your employer requests or demands you sign any business agreement after your employment, the Georgia Courts will likely look at this as a coercive tactic not bargained for with your employment. In such instances, a smart employer with offer some consideration besides “implied” or “actual” continued employment. On such example would be coupling the signing of a Georgia business contract with a salary change or restructured benefits.

If your employer requires you sign a Georgia business agreement concerning your employment, you should play it safe and retain an Atlanta business lawyer to review this agreement and advise you concerning the consequences of your decision. In contrast, if you are an employer, and you feel that your employees should be bound by the terms of any business agreement. You should have a Georgia Business attorney or a Georgia business law firm to carefully craft your Georgia business contracts or review the ones you presently have to see if they are enforceable.
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As an Atlanta, Georgia business contract lawyer, I often see clients who are threatened with a lawsuit seeking to stop them from competing with their former employer. I also see many “former employees” of these employers who are surprised to find that in many instances, these non-competition (“non-compete”) contract, provisions and clauses can and will be enforced. Nevertheless, whether they will be enforced by a Georgia Court, depends on many different factors. In deciding whether to enforce a “non-compete” agreement, Georgia Courts must find that the non-competition provisions of the employee’s contract were “reasonable” in the following areas:

1. Geography – As a Georgia non-competition attorney who has business clients who are both employee and employer, the competition must be restricted to a reasonable geographic area. What is “reasonable” depends on the area of work involved, the demographics of the area, and many other factors.

2. Time Period – To be enforceable, a Georgia non-compete agreement must be reasonable in the scope of time it restricts an employee from working. This largely depends on the type of work, the frequency of the type of employment which occurs in the demographic area, and many other factors. As an Atlanta business contract attorney, I am seeing that more and more employers try and push the outer limits of a time period for a former employee to work in a competitive field. As a general rule, two years is about the maximum amount of time a former employee can be restricted from working. More common, is a one year restriction from competing.
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As an Atlanta, Georgia business contract lawyer, I am seeing more and more disputes and litigation concerning non-competition agreements (often referred to as “non-compete agreements”) and non-solicitation agreements. The underlying reason I am hearing from my Georgia business clients is that they are being sued because there is only a limited amount of Georgia business in Atlanta, Georgia. This is especially true in with the densely populated metro Atlanta areas. In contrast, many of my Georgia business clients are suing because they feel there is not enough business to go around in these difficult times and they need to protect themselves from unfair competition and the “stealing” of their clients. Much of the reasoning behind these Georgia non-competition (“non-compete”) and non-solicitation lawsuits, and reasons to enforce them or bring them, is that there is a general lack of Georgia consumer business in the Metro Atlanta, Georgia area.

If your employer has requested you sign a Georgia non-competition agreement or Georgia non-solicitation agreement, you should retain a Georgia business contract lawyer to review, give advice and negotiate the terms of your employment. Should you However, if you are being sued for breach of such an agreement, you should immediately seek Georgia business counsel to defend you against such a law suit. Or, if you are an employer, and you feel that your employee has left and is unfairly competing against your company and which to enforce the Georgia business agreement, you need a GA law firm who specializes in Georgia business law and Georgia business contracts.
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As an experienced Atlanta Business Attorney, I frequently advise clients on Georgia employment contracts both for the employer and for employees. In giving advice to those on “both” sides of the desk, I have become familiar with the concerns Atlanta contract lawyers, Atlanta business employers and owners and Atlanta employees have in regards to Georgia employment agreements.

I cannot underscore or emphasize enough the importance of having all your Georgia business contracts drafted, reviewed, and advised upon by an experienced Atlanta Business Lawyer. It is commonplace to see that the necessity of this only hits home when business needs change and business owners-employers and employees alike have to take into consideration, workout or litigate what was not contemplated, or memorialized in writing, when the employer-employee relationship began.

In my practice as Atlanta Business Contract Lawyer, I see the worst in good people, both employer and employee alike. This most often occurs when the simple terms sets forth both below are not set out in detail in a Georgia business contract. Also essential to any Georgia business employment contract, is a comprehensive understanding of the contract. A Business contract is only as good as the parties understanding of it in addition to their adherence and compliance with such contract. As such, I have set forth a list of what I call essential elements and which need to be addressed in any Georgia employment contract. Below is a short list of issues to be considered, negotiated, memorialized, and reviewed by an experienced Atlanta Business Contract Lawyer.

1. Term of Employment: Georgia Employment agreements are considered “at-will” if they do not otherwise specify. When advising on Georgia business contracts, I usually suggest that the Georgia employment agreement specify whether it is for a specified term, with options to renew, negotiable at the end of any term or “at-will.” Also essential to the term of employment are factors such as deferred compensation, health insurance, 401K benefits, and a host of other compensation issues.

2. Position, Job Responsibilities, and Function: Georgia employment agreements should contain specific terms, which set forth the employee’s status with the business, the responsibilities of both the employee to the business and employer, but the business and employer to the employee (i.e. training, travel expense account, etc.).
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