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Is your noncompete agreement enforceable?

Drafting and signing noncompete agreements are decisions that should not be taken lightly. These documents can impose strict limits on employees and partner, and are often critical in protecting a company's interests.

Considering how powerful these documents can be, you would be wise to review them with an attorney. In some cases, it may be discovered that a noncompete agreement is not enforceable.

As is the case with other legal documents, a noncompete agreement must fit certain criteria in order to be effective. As noted in this article, this means it should:

  • Provide a benefit to the signing party, like employment
  • Protect confidential information or a legitimate interest for the business
  • Be reasonable in the limits it sets on the information and the signing party

If these elements are not fulfilled, Georgia courts may determine that a noncompete agreement not enforceable. This means employees would not be bound to the terms and restrictions set in the unenforceable document.

Another thing to note is that, while they may not affect enforceability, there are other factors to consider before entering into this relationship with another party, including:

  • Which employees are asked to sign a noncompete
  • What type of penalties will be issued in the event of a breach
  • How strictly behaviors will be limited by the agreement
  • How the agreement will impact an employee's livelihood

These elements could significantly impact whether you want to enforce or sign an agreement in the first place.

If you feel that a noncompete agreement is unenforceable or if you would like to ensure that it is properly drafted, then you would be wise to consult an attorney with experience in business litigation and contracts.

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Robert Kaufman has been selected as a 2013 Top Rated Lawyer in ‘Commercial Litigation’ as will be published in the May issue of The American Lawyer & Corporate Counsel magazine.Alex Kaufman has been selected as a 2013 Top Rated Lawyer in ‘Commercial Litigation’ as will be published in the December issue of The American Lawyer & Corporate Counsel magazine.

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