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Restrictive Covenants Governed By “New” Law Are Interpreted Similarly To Restrictive Covenants Governed By “Old” Law

In 2011, Georgia adopted a set of laws governing post-employment restrictive covenants (covenants not to compete, not to solicit customers, not to poach co-workers, not to use or disclose confidential information belonging to the employer, etc.).  Prior to the adoption of these “new” laws, it was very difficult to draft post-employment restrictions that were enforceable under Georgia law.  The stated intent of this “new” set of laws was to make it easier for Georgia employers to enforce restrictions against departed employees.  As is explained below, the “new” laws may not have changed the rules for enforcement of restrictive covenants as much as had been expected.

After nine years, only a handful of appellate court decisions have interpreted the “new” laws, leaving unresolved a lot of questions about the scope and interpretation of the “new” laws. The most recent decision, Belt Power v. Reed (March 2020), resolves some of those questions.  In a move that may surprise some practitioners, Belt analyzes restrictive covenants very similarly to the way they were analyzed under the “old” law. 

Key takeaways from Belt include:

Belt reinforces just how important it is for employers and employees alike to engage an attorney who really understands restrictive covenants.  Ms. Myer has drafted and obtained court enforcement of restrictive covenants for 25 years, applying both the “new” laws and the “old” laws.  If you need legal advice regarding restrictive covenants in an employment agreement for a Georgia employee, please contact Ms. Myer.

This article is not intended to be comprehensive, but briefly summarizes a recent Georgia court decision governing restrictive covenants.  The analysis set forth in this article is provided for general understanding only and should not be considered legal advice.  Counsel should always be consulted for advice regarding a specific situation.