On November 2, 2010, Georgia voters will be asked to approve a constitutional amendment that will give effect to Home Bill 173 (the “Georgia Restrictive Covenant Act”). If approved, the Act will dramatically change the enforceability of restrictive covenants in employment and certain other agreements which are entered into after the Act takes effect. Below are frequently asked questions and answers regarding the Act.

Q: Is the Act retroactive?

A: No, the Act will not be retroactive. It will only apply to contracts entered into on or after November 3, 2010.

Q: Should I change my existing employment agreements now or wait until after November?

A: Although you should begin preparing now to implement new agreements once the Act takes effect, you should wait until November 3, 2010 to execute new agreements.

Q: After November, do I need to change my employment agreements?

A: You should change your employment agreements after November 2, 2010 to take full advantage of the broader protections provided by the Act.

Q: Do I need to review or revise restrictive covenants in other agreements (such as distribution, franchising, lease, etc.) to see if they should be updated?

A: Yes. If the new Act takes effect, it will apply not only to employment agreements, but also to distribution, franchising, independent contractor, and certain other agreements.

This information is provided for educational purposes only and is not intended to constitute legal advice; see disclaimer at http://www.www.mmmtechlaw.com/privacy-policy-and-disclaimer/. Please contact Jason D’Cruz of the MMM Employment Group with any questions: 404-504-7601; rjd@mmmlaw.com