Michael Elkon Published in the Newsletter of the Technology Law Section of the State Bar of Georgia
“Georgia’s New Non-Compete Statute and its Potential Effect on Technology Companies”

Michael Elkon’s article, “Georgia’s New Non-Compete Statute and its Potential Effect on Technology Companies,” was published in the June 2009 issue of the Technology Law Section of the State Bar of Georgia newsletter. In his article, Michael discusses the complexity of the current laws governing non-compete, non-solicitation of customers, and non-disclosure of confidential information covenants in Georgia. He also discusses the challenges businesses face when figuring out which rule applies to certain situations. Michael notes, “Georgia has a dense thicket of cases that create a series of traps for companies seeking to enforce restrictive covenants.”

In his article, Michael explains how the recently passed HB 173 statute sets forth rules for the temporal and geographic scope of restrictive covenants, as well as the types of activities that can be proscribed and the categories of employees who can be bound by such prohibitions. The goal of the statute is to create an easily understood legal regime to govern the enforcement of restrictive covenants, as opposed to heavily populated universe of case law that supplies the current framework. Michael recommends that “technology companies should be especially interested in HB 173” because “restrictive covenants are particularly important in the technology field.”

The statute raises three specific issues for technology companies to consider: the replacement of an outdated system, new rules for non-disclosure covenants, and balancing the interests of employers and employees. Michael concludes, “If HB 173 gets passed in November 2010, Georgia law will be closer to the law in the majority of states, helping national companies with operations in Georgia. It will lead to better results for companies.”