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Covenants Not to Compete

Covenants Not to Compete. Jody Blanke, Professor Computer Information Systems and Law Mercer University, Atlanta. Covenants Not to Compete. Non-employment related e.g., related to sale of business e.g., Joe the Baker Employment-related. Covenants Not to Compete. Employment related

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Covenants Not to Compete

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  1. Covenants Not to Compete Jody Blanke, Professor Computer Information Systems and Law Mercer University, Atlanta

  2. Covenants Not to Compete • Non-employment related • e.g., related to sale of business • e.g., Joe the Baker • Employment-related

  3. Covenants Not to Compete • Employment related • e.g., Brenda Wood agrees not to work as an on-air news anchor in the Atlanta/Athens television market for 6 month. • California will not enforce such an agreement as an illegal restraint of trade • Georgia used to be very strict about enforcement of these covenants • would not “blue pencil” such an agreement

  4. Covenants Not to Compete • Scope • agreement must specify what activity is to be limited • Geography • be careful of terms like Atlanta • Duration • e.g., 6 months, 1 year, 2 years

  5. Election Day 2010 • Georgia Constitutional Amendment • “Shall the Constitution of Georgia be amended so as to make Georgia more economically competitive by authorizing legislation to uphold reasonable competitive agreement?” • 68% said “Yes”

  6. O.C.G.A. § 13-8-50 et seq. • Courts may now “blue pencil” the agreement • Two years is presumed reasonable • Need not specify a geographic restriction • Law targets “key employees” • executive employees • employees in possession of important confidential information, or • Employees with specialized skills, knowledge, or customer contacts or imformation

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