Noncompete clause must be very specific or it may be invalid

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in Employment Law,Human Resources

Employers who want to preserve their competitive advantage often require employees or contractors to sign noncompete agreements. But Georgia agreements must be very specific, detailing exactly what type of employment is prohibited. If the agreement is too broad, a judge may toss it out.

Recent case: Maxine Thompson signed a one-year employment contract with Avion Systems. Under the agreement, Thompson was assigned to work for other companies that contracted with Avion.

The agreement also included a noncompete clause, which banned Thompson from becoming an employee of any of the client companies Avion assigned her to work with until more than 12 months had passed since the assignment or Avion’s contract ended. The clause was very general, preventing Thompson from any relationship with the third party for “pecuniary gain.”

Thompson quit and went to work for a company Avion had assigned her to. Avion sued. But the Court of Appeals of Georgia tossed out the case. It concluded the clause was too general because it did not specifically state what business activities were prohibited. It was overly broad and unenforceable, the court said. (Avion v. Thompson, No. A07A1488, Court of Appeals of Georgia, Third Division, 2007)

Final note: Individually draft each noncompete agreement to make sure it's specific enough to be enforceable. It’s a good idea to involve counsel. That way, you can be sure the agreement will do what you want it to do—protect you from unfair competition by a former employee.

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