Georgia Legislature Passes Revised Restrictive Covenants Law

During the final hours of the 2011 legislative session, the Georgia Legislature passed a revised law governing restrictive covenants (covenants not to compete, covenants not to solicit customers, covenants not to solicit other employees and nondisclosure agreements).  The Governor is expected to sign the legislation, but he has not done so at this writing.  Although most of Georgia’s new laws become effective on July 1 of the year in which they are enacted, the new restrictive covenant legislation is expected to state on its face that it will become law immediately upon being signed by the Governor.

Several other articles and posts on this website discuss restrictive covenant legislation that was passed by  the Georgia Legislature in 2009 and that attempted to completely revamp several decades of Georgia case law governing restrictive covenants.  That legislation, which was unconstitutional when enacted, stated on its face that it would become effective upon passage of a constitutional amendment that would render it constitutional.  The constitutional amendment was passed by Georgia voters in November 2010.  During the past several months, a drafting flaw has come to light that has given opponents of the legislation multiple arguments that the legislation was not properly enacted and thus is not enforceable.  To try to protect against those arguments, during the 2011 session the Legislature passed a modified version of the 2009 legislation.  This new legislation merely adds to the considerable confusion regarding not only the interpretation, but also the effective date, of the Georgia statutes governing restrictive covenants.  Stay tuned as matters develop….

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