On November 2, 2010, Georgia voters approved a constitutional amendment which authorized a new statutory framework for enforcing Georgia restrictive covenants. Georgia has not generally been friendly toward employers’ use of restrictive covenants, but this new framework will permit Georgia courts much more flexibility in enforcing restrictive covenants. There are several significant changes provided within the new law, but one of the major changes is the discretion to modify, sever or blue pencil restrictive covenants in employment agreements.
The new law will go into effect immediately, but applies only to restrictive covenants entered into on or after November 3, 2010. The more restrictive case law would apply to agreements signed prior to November 3, 2010.
The new law is broader than simply employment-related restrictive covenants, and also applies to franchise, distributorship, lease and partnership agreements. This is a very good development for businesses that operate in Georgia.