Non-Compete Agreements

Thrift McLemore’s Atlanta business law attorneys help clients across Georgia understand, prepare, and enforce non-compete agreements to protect business interests and clarify rights.

Non-compete agreements often appear in job offers and employment contracts. Employers use them to protect the business, including customer relationships, trade secrets, and competitive advantages. The basic idea is simple: if you leave the company, you should not be able to immediately take what you learned and open a competing business right next door.

What is a Non-Compete Agreement?

A non-compete agreement, sometimes called a “covenant not to compete” or a “restrictive covenant,” is a contract between an employer and an employee. By signing it, the employee agrees not to compete with the business during their employment and for a specific period of time after leaving.

Most agreements try to stop employees from:

• Starting or joining a competing business
• Using or keeping customer lists
• Sharing confidential strategies, processes, or trade secrets

Example: Imagine a Georgia pest control company that creates a unique, all-natural pesticide. The company would not want an employee to leave, start their own service down the street, and use the same secret formula. A non-compete agreement helps prevent that.

Who Can Be Bound by a Non-Compete in Georgia?

Not every employee can be bound by a non-compete agreement. These agreements usually apply only to people in certain roles, such as:

• Sales employees who regularly interact with customers
• Managers or supervisors who make business decisions or direct staff
• Professionals or key employees with access to sensitive information

If an employee does not fit into one of these categories, a non-compete may not be enforceable.

What Makes a Non-Compete Reasonable in Georgia?

Courts in Georgia look at whether the restrictions are reasonable in three areas: time, location, and scope.

• Time: A period of two years or less is usually considered acceptable.
• Location: The restriction should be tied to where the company actually does business. A 20-mile radius might make sense. Covering the entire state of Georgia usually does not.
• Scope: The restriction must serve a real business purpose. Preventing someone from working in the same industry altogether is too broad. Preventing them from using a specific trade secret is much more likely to hold up.