Georgia’s New Restrictive Covenant Act Turns One Year Old

Friday, May 11, 2012 marked the one-year anniversary of Georgia’s new Restrictive Covenant Act ("New Act"). As we have written on this blog before (here and here), passage of the New Act marked a dramatic change in Georgia’s public policy regarding restrictive covenants in employment agreements. Prior to passage of the New Act, Georgia was one of the most difficult jurisdictions for employers to enforce restrictive covenants against former employees. With the passage of the New Act, Georgia is now a comparatively favorable forum for employers seeking to enforce restrictive covenants against former employees.

Among other changes, the New Act creates statutory presumptions under which courts must presume that restrictive covenants two years or less in duration are reasonable in time and that restrictive covenants more than two years in time are unreasonable. It also eases the drafting requirements for specific restrictive covenants, abolishes the previously existing requirement of a time-restriction for non-disclosure provisions, and creates a statutory burden-shifting regime whereby, if employers can meet an initial burden of showing that restrictive covenants are in compliance with the statute, parties challenging such restrictive covenants bear the burden of establishing that the covenants are unreasonable.

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