Businesses spend a lot of time and money training their employees. It can be frustrating when one of these employees decides to leave and take their new skills and experience elsewhere, especially if they take it to a competing business.
For that reason, many businesses ask new employees to sign a noncompete agreement, a type of contract, or a clause within an employment contract, in which the employee agrees to not work within a certain industry and/or within a certain geographical region for a period after leaving their current position. Often, these agreements give the employer the right to take legal action against the worker if they violate the agreement.
By some estimates, 32 million American workers are subjects of noncompete agreements.
The days may be numbered for this type of agreement, however. The federal government and many state governments have started to crack down on them.
Critics of noncompete agreements
Workers and worker advocates have long hated noncompete agreements, calling them an unconscionable infringement on an individual’s freedom to choose where they want to work. New workers often don’t feel they can negotiate these agreements, and so they sign them without truly consenting to them.
And these agreements may be worse for some types of workers than for others. According to news reports, several studies have shown that noncompete agreements disproportionately affect women and people of color, holding them back in jobs when they might be able to pursue better opportunities with other employers.
Critics of noncompetes say that outlawing the agreements will mean millions of Americans are free to find better work and better paying jobs.
Movement against noncompetes
In recent years, courts, state lawmakers and others have increasingly agreed with these critics. Several states have outlawed noncompete agreements, and several more have strictly limited their enforceability.
Georgia is not one of these states. Georgia courts can still enforce these agreements, but that may be changing.
Recently, the Federal Trade Commission proposed a nationwide ban on noncompete clauses. That proposal is now up for public comment.
The laws underlying business and employment are always changing. Businesses need help from attorneys who understand the law and how it affects their clients’ operations. Much business litigation can be avoided through careful planning and compliance with the law, but when business litigation is unavoidable, it’s crucial for businesses to have help from experienced business law attorneys