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Ask Alex Reese Your Own Question
Alex Reese
Alex Reese, Lawyer
Category: Intellectual Property Law
Satisfied Customers: 3466
Experience:  Experienced in intellectual property law
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What is the maximum non-compete duration possible when

Customer Question

What is the maximum non-compete duration possible when working with Independant contractors? This is for a software product where independant contractors are used to develop the product.
Submitted: 2 years ago.
Category: Intellectual Property Law
Expert:  Alex Reese replied 2 years ago.
what state are you in?
Expert:  Alex Reese replied 2 years ago.
it will vary by state law (and some states may not have clear guidelines)...for example in California courts are strict on Non-Compete provisions and require the restrictions to be very reasonable
Customer: replied 2 years ago.
I am in GA.
Expert:  Alex Reese replied 2 years ago.
Hello. The laws have changed recently....the old law essentially forbid non-compete agreements. Now, they are allowed. While the term must be "reasonable", there is a no set legal duration, its all on a case-by-case basis. But its fair to say that a restriction "forever" or for "10 years" would not be enforceable, whereas a restriction for 2 years would have a far better chance of being valid (of course there are other aspects not just the duration, that matter, like the geographic scope of the restriction. At least one guideline has been offered by the courts, i.e. a restricted time period equal to or measured by the duration of the parties’ business relationship is presumed reasonable.
For example:
In PointeNorth Insurance Group v. Zander, 2011 U.S. Dist. LEXIS 113413 (N.D. Ga. Sept. 30, 2011), Judge Richard Story was asked to enforce a non-solicitation covenant that purported to prohibit a former employee, Zander, from soliciting or accepting business from clients. Such a covenant would have been completely unenforceable under Georgia’s old non-compete law. Under the new law, however, Judge Story enjoined Zander from soliciting any of PointeNorth’s customers with whom she had contact during her employment.
Key Provisions In the New Law Enforcing Non Compete Agreements
Pro Employer Provisions
Restrictions of 2 years or less are presumed reasonable for post employment non-compete agreements.
Agreements void in part can now be enforced in part. (Blue Pencil rule abolished)
Post Employment restrictions that lack an express reference to a geographic area are now enforceable.
Restrictions during employment which lack specific limitations upon scope of activity, duration, or territory, are not deemed unreasonable so long as such promote or protect the purpose or subject matter of the agreement or deters any potential conflict of interest.
Pro Employee Provisions
Low level employees may be exempt from many provisions in this Act if they lack selective or specialized skills, learning, or abilities or customer contacts, customer information, or confidential information. (means they may be less bound by a restrictive covenant than higher level employees)
Employees can demand for a clarification on the restrictive agreement. The employer has 30 days to respond in writing. A response that lessens the employee's restrictions can be used against the employer in court. 13-8-2.1(f)(2) and (3).
Any failure or delay of the persons or entities that benefit from such restraint to respond to such a demand shall be considered as one factor by a court against the restricting employer. 13-8-2.1(f)(4). However, the employer may choose to state that no clarification is needed because they believe the restraint to be clear
For more info see
http://www.bankbryancave.com/2011/06/a-new-era-for-georgia-non-compete-agreement/