Employment agreements in Georgia are designed to establish the terms and conditions between an employer and an employee. While Georgia operates under "at-will" employment, meaning either party can terminate the relationship at any time with few exceptions, contracts can specify important details and protections. There are several types of employment agreements in Georgia.

Employment Contract

A core employment contract outlines the fundamental aspects of the employment relationship. These contracts are not mandatory by law but are advisable for both employers and employees to ensure clarity on expectations. An employment contract can cover a range of terms, including job title and duties, compensation (salary, bonuses, commissions), benefits (health insurance, paid time off), and term of employment.

Employment contracts can be written, oral, or implied through company policies and employee handbooks. However, written contracts exceeding one year are advisable under Georgia's Statute of Frauds. Georgia law influences the enforceability of certain provisions within the contract.

Independent Contractor Agreement

This agreement clarifies the working relationship between a business and an independent contractor, not an employee. Independent contractors are self-employed individuals providing services to the company but are not subject to company taxes or regulations on work hours and benefits. An independent contractor agreement should establish the scope of services provided by the contractor, payment terms and conditions, ownership of intellectual property created during the contract, and term of the agreement.

Restrictive Covenant Agreements

These agreements limit an employee's activities after leaving the company. There are three main types of restrictive covenant agreements:

• Confidentiality Agreement (Non-Disclosure Agreement): This agreement restricts the employee from disclosing the company's confidential information.
• Non-Compete Agreement: This agreement restricts the employee from competing with the company for a certain period after termination, within a specific geographic area. However, Georgia courts have limitations on how these agreements can be enforced.
• Non-Solicitation Agreement: This agreement restricts the employee from soliciting the company's clients or employees after termination.

Employment agreements in Georgia can be beneficial for both employers and employees by clearly outlining expectations and rights.

Basic Employment Details

The agreement should clearly define the employee's position, duties, and responsibilities. It should specify the commencement of employment and the primary workplace. The agreement should also outline the employee's salary, bonuses (if applicable), and any benefits offered, such as health insurance, paid time off (PTO), etc.

Termination

The agreement should address grounds for termination by both employer and employee, along with required notice periods. It should also outline any severance package offered in case of termination.

Dispute Resolution

The agreement should establish a process for resolving disagreements arising from the employment agreement. This may involve mediation or arbitration.

Additional Considerations

The agreement should state that it constitutes the complete agreement between the parties, superseding any prior agreements. It should also specify the state law that governs the interpretation and enforcement of the agreement, which would be Georgia in this case.

In Georgia, the Labour Code permits employers to set a probationary period in employment agreements to evaluate an employee's aptitude for the job.

Maximum Duration

The probationary period in Georgia can last up to six months. This rule applies to all employment agreements established with an individual for the first time. The Labour Code clearly specifies that a probationary period can only be implemented once within the context of a single employment relationship.

Termination During Probation

During the probationary period, both employers and employees have the right to terminate the employment relationship without needing to provide a reason. This implies that employers can dismiss a probationary employee without facing legal consequences, provided they comply with anti-discrimination laws.

Important Note: Recent court cases in Georgia suggest that employers should take into account established practices when terminating probationary employees, even though the law does not require a specific reason.

Key Points

• Probationary periods are intended to evaluate an employee's suitability for the role.
• The maximum duration is six months.
• Probation can only be implemented once per employment relationship.
• Both employers and employees can terminate the contract during probation without providing a reason.

Employment agreements in Georgia often include two key clauses that limit an employee's activities post-employment: confidentiality agreements and non-compete agreements. These clauses have distinct functions and different legal enforceability standards.

Confidentiality Agreements

Confidentiality agreements, also known as non-disclosure agreements (NDAs), safeguard an employer's trade secrets and other confidential data. These agreements usually specify what is considered confidential information and forbid employees from revealing it to unauthorized individuals or entities. Georgia law, under the Georgia Trade Secrets Act, upholds the enforceability of confidentiality agreements, provided the information meets specific criteria for secrecy and economic value.

Non-Compete Agreements

Non-compete agreements, or covenants not to compete, limit an employee's capacity to work for a competitor or establish a competing business for a certain duration and within a specific geographic area after leaving the job. The legal landscape for non-compete agreements in Georgia is more intricate compared to confidentiality agreements.

The Georgia Restrictive Covenants Act of 2011 governs the enforceability of non-compete agreements. Here are the key points:

• Enforceability: Non-compete agreements are generally enforceable, but only if they are reasonable in terms of time, geographic area, and scope of restricted activities.
• Reasonable Time: The maximum enforceable duration for a non-compete agreement is two years, although courts may deem shorter periods reasonable depending on the circumstances.
• Reasonable Geographic Area: The non-compete's geographic scope must be confined to a specific area where the employee had substantial contact with customers or potential customers.
• Scope of Restricted Activities: The non-compete can only restrict the employee from working for competitors or participating in activities that directly compete with the employer's business.

The Act only permits non-compete agreements to be enforced against certain types of employees, including:

• Salespeople.
• Managers who supervise at least two employees and have hiring/firing authority.
• Key employees or professionals.

Non-compete agreements that fail to meet the reasonableness standards or target the wrong category of employees will likely be deemed unenforceable by a court.

Additional Considerations:

• Severability: Georgia's "Blue Pencil" rule allows courts to modify unreasonable aspects of a non-compete agreement while upholding the rest, provided the changes don't significantly alter the overall intent.
• Pre-May 2011 Agreements: Agreements signed before May 11, 2011, are evaluated under the less employer-friendly pre-2011 law.