Noncompete News: Georgia's New Restrictive Covenants Act


On November 3, 2010, Georgia voters approved a constitutional amendment giving effect to a restrictive covenant statute passed in 2009. It appears that this statute will become effective on January 1, 2011. The statute, known as the Restrictive Covenants Act ("RCA"), represents a significant change to existing Georgia law. Restrictive covenant agreements entered into prior to January 1, 2011, are controlled by pre-existing Georgia law.

As discussed in prior Non-Compete News articles, Georgia was a "no-blue pencil" state. In essence, what that means (and what that still means for all Georgia restrictive covenants employment agreements entered into prior to January 1, 2011) is that a court is not allowed to modify the language used in the agreement. Because the agreement lives or dies on its face, drafting an enforceable Georgia restrictive covenant required practitioners to carefully study existing Georgia common law.

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DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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