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non-compete contract

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GlendaT

Guest
What is the name of your state? Georgia

In a nutshell, are non compete contracts legal in Georgia? I am having a horrible time with one of my ex-employers. I signed a no compete contract with her, quit working for her, (I work at home doing medical transcription, not an actual "employee", more like a subcontractor for her service), then about 6 months later, a doctor she did work for in the PAST, no longer doing work for him for about a year prior to him calling me, to do his work. Somehow, she found out about this and is now demanding $20,000 from me for breaching the no compete contract. Is this legal?

:confused: :confused:
 


cbg

I'm a Northern Girl
As far as I know, the concept of a non-compete is legal in GA. Whether the one you signed is binding or not will depend on the specific terms. You will have to show the non-compete to a local attorney.
 

JETX

Senior Member
"Contracts and Non-Disclosure/Non-Compete Agreements

Georgia law governs employment contracts, non-disclosure agreements and non-compete agreements. In order to be binding, an employment contract must specify a place of employment, the specific period of employment (months, years), the services to be rendered and the rate of compensation. If the period of employment is indefinite, then there can be no contract and the relationship is merely "at will." Promises from employers regarding future pay, raises, promotions, etc., are not enforceable unless they are contained in a valid employment contract. We regularly represent clients in negotiations and settlements with soon-to-be former employers regarding the terms of severance agreements, viability of non-compete and non-disclosure agreements, and arbitration agreements."
Source: http://www.pcwmlawfirm.com/site/area/employment_law_and_litigation.htm

You might also want to review the GA non-compete issues on the following:
http://www.elinfonet.com/starticles/11/2.html
http://www.alston.com/docs/Articles/199709/Kevin.htm
http://www.rkmc.com/news.articles.read1.cfm?AID=201
 
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GlendaT

Guest
Ok, I am still confused here. Does a no compete contract have to state all that information listed above or just an employment contract?

One more thing...the doctor that called me and asked me to do his transcription is the one who contact my former employer about my working for him, after he got mad because I quit doing his work for him. Is there anything legally I can do to him?

Thanks!
 

JETX

Senior Member
Did you take the time to click on AND READ the links that I attached???

If so, you would find out that non-competes have certain requirements and that they must be met. Also, not ALL courts review non-competes the same way. Read the links!
]
 
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GlendaT

Guest
Yes, I have tried to pull up the links posted above, but #1, they are not clickable, and #2, when I type them in, nothing comes up. Thanks, anyways
 

JETX

Senior Member
#1, "they are not clickable"
That is correct. The ability to put hotlinks into our messages has been disabled due to recent abuses by posters.

#2, "when I type them in, nothing comes up"
Then you need to retype them correctly or to cut and paste them into your browser address line. I just did and they work just fine.

Here is an excerpt from one of them:
"I. Choice of Law Issues in Non-Compete Agreements.

Under Georgia choice of law principles, the law of the jurisdiction chosen by the parties to govern a contract will apply, unless the law chosen will contravene the public policy of Georgia. Hulcher Services, Inc. v. R.J. Corman Railroad Co., LLC, 247 Ga. App. 486, 543 S.E.2d 461 (2000); See also, Nasco, Inc. v. Gimbert, 239 Ga. 675, 238 S.E.2d 368 (1977); Bryan v. Hall Chemical Co., 993 F.2d 831, 834 (11th Cir. 1993). Georgia has a strict public policy against restraints on trade, which has resulted in "employee restriction" contracts in Georgia being subject to strict scrutiny. Bryan, 993 F.2d at 834. This policy has its origin in the Georgia Constitution, Article III, Section VI, Paragraph V(c) which provides:

The General Assembly shall not have the power to authorize any contract or agreement which may have the effect of or which is intended to have the effect of defeating or lessening competition, or encouraging a monopoly, which are hereby declared to be unlawful and void.1

Where a non-compete covenant in the employment context creates a restraint on trade, it is against Georgia public policy and therefore unenforceable. This policy results in many non-compete covenants being construed under Georgia law, despite the parties' intention to apply the law of another state. In Hulcher Services, although the parties agreed that the contract would be governed by Texas law, the court found that Texas non-compete law was adverse to Georgia public policy, and applied Georgia law. 543 S.E.2d at 465; See also, Nasco, 238 S.E.2d at 369 (applying Georgia law despite the parties' agreement that Tennessee law would apply); Enron Capital & Trade Resources Corp. v. Pokalsky, 227 Ga. App. 727, 490 S.E.2d 136 (1997)(applying Georgia law over Texas law); Barnes Group, Inc. v. Harper, 653 F.2d 175, 178 (5th Cir., Unit B 1981), cert. denied, 455 U.S. 921 (1982)(applying Georgia law over Ohio law); Marketing and Research Counselors, Inc. v. Booth, 601 F.Supp. 615, 616 (N.D. Ga. 1985)(where non-compete covenants lacked territorial restrictions and it would be contrary Georgia public policy to enforce a covenant without a territorial restriction, the court applied Georgia law despite the presence of a choice-of-law provision that the covenants were to be governed by Texas law).

Notwithstanding Georgia courts' unwillingness to enforce choice-of-law provisions where it would be contrary to public policy, in April 2000, the Georgia Court of Appeals held that a forum selection clause in an employment agreement containing non-compete provisions is enforceable. Iero v. Mohawk Finishing Products, Inc., 243 Ga. App. 670, 534 S.E.2d 136 (2000). The plaintiff, Iero, worked for Mohawk within the state of Georgia. He entered into an employment agreement containing non-competition restrictions and a forum selection clause requiring all suits to be brought in New York. Iero resigned from Mohawk and immediately started competing in violation of his non-compete agreement. He brought a declaratory judgment action in Georgia, seeking to have his non-compete agreement declared unenforceable. Id. at 137. The Court of Appeals held that forum selection clauses, even in employment agreements, are prima facie valid unless the opposing party shows that enforcement is not reasonable under the circumstances. Iero failed to show that it would be inconvenient for him to litigate in New York or that the forum selection clause violated Georgia public policy. Iero also failed to address whether a New York court would even apply New York law. As a result, the forum selection clause was enforced. Arguably, if the covenant were enforced under New York law, it would violate the Georgia public policy against restraints on trade and therefore be unreasonable. However, because Iero failed to raise this issue, it was not addressed by the court."
 
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GlendaT

Guest
I really appreciate your help. This no compete clause clearly encourages her to have a monopoly on all the transcription in our county. Also, I believe she altered the original document I signed to make it look like I signed something else.

Thanks again for all your help.

;)
 

JETX

Senior Member
Of course, you are welcome.

Though I have not read your agreement, it is my BELIEF and opinion that it would very probably be found unenforcable. Especially, considering that it would be against the principles of Georgia Constitution (as noted in my post) and also that you were NOT an employee.

Best of luck to you.... and your medical transcription business.
 
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GlendaT

Guest
I'm sure I will sleep a lot better tonight knowing what I know now. However, I am going to have a paralegal at my church take a look at the contract, just to be sure.

Mind if I ask one more question? I hope not, cause here it goes;

Since it was the doctor I was working for who informed my former "employer" that I was doing his work, is there anything legally I can do to him? Without him telling her, there is no way she could have found out.

Thank you so much for your time and advice.
 

JETX

Senior Member
"Since it was the doctor I was working for who informed my former "employer" that I was doing his work, is there anything legally I can do to him?"
No. He told the truth, therefore, no defamation.... and there was no expectation (or obligation) of secrecy.
 
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GlendaT

Guest
Oh, well. I think I'll just let the whole matter drop with him. Though, I am going to have an attorney send my former employer, or whatever you want to call her, a nice little letter. Thanks for all your advice. :)
 
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tamwham2

Guest
texas

halket, could you provide me the link for texas non- comp. law??

thanks
 

JETX

Senior Member
Since the original writer has noted that they are going to let this matter drop, I will go against my 'normal' practice and post a response to the 'piggyback' message......

In Texas:
Many employment contracts contain covenants not to compete, non-disclosure agreements, or both. Covenants not to compete are the most difficult for the employer to enforce if the provisions are not written properly.

The Texas Courts and the Texas Legislature disagree about the enforceability of non-competition agreements. The Supreme Court of Texas has held that for a non-compete agreement to be enforceable, the employer must have some type of agreement with the employee which gives the employee something of value (most often trade secrets, confidential information or other proprietary information) which the employee promises not to disclose.

A properly written and generally enforceable non-compete agreement will also contain language which:
(1) limits the geographical area to which the agreement applies;
(2) limits the duration of time that the agreement will be in effect; and
(3) details the scope of the activity which is prohibited.

Courts will generally decline to enforce any non-compete agreement which seems to overly restrain someone from earning a reasonable living.

By contrast, a non-disclosure agreement does not restrain a former employee from earning a living, it merely restricts a former employee from competing with the former employer by using secret, confidential or proprietary information which the employee obtained while working for the former employer.

For a non-disclosure agreement to be enforced, the information obtained by the former employee must be truly confidential and not just general knowledge or experience acquired by the employee during the term of employment. To determine if the information obtained by the employee falls under the secret, confidential or proprietary banner, courts may look at the following: whether the access to the information is physically restricted; whether employees who have access to the information are required to sign confidentiality agreements and are educated by the employer as to the need to protect such information; whether outside suppliers, vendors, contractors, distributors, sales reps, etc. who have access to the information are required to sign confidentiality agreements; whether chemical formulations, computer data, and similar information is coded to restrict access or to disguise the identity of the information.

When drafting both types of agreements, it is important not to use overly broad language and to be as specific as possible when detailing the types of conduct which you wish to specifically prohibit.

The applicable section of Texas statutes covering non-compete covenants is in Business and Commerce Code, Sections 15.50 and 15.51.
http://www.capitol.state.tx.us/statutes/bc/bc0001500.html#bc018.15.50
http://www.capitol.state.tx.us/statutes/bc/bc0001500.html#bc018.15.51
 
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tamwham2

Guest
very informative, thanks halket.



onk onk :D
 
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