Ways a covenant not to compete limits employees

On Behalf of | Jul 6, 2021 | Business Law

Many employers in Georgia require their employees to sign a covenant not to compete agreement when they accept a job offer. However, this type of agreement isn’t always in the employee’s best interest. There are some ways that a covenant not to compete agreement limits an employee.

Makes them susceptible to litigation

If an employee breaks a covenant not to compete, the company can sue them. This is an area of business law where employers have a good chance of winning their case as the covenant not to compete makes a legal violation fairly easy to prove.

Prevents them from working with competitors

Many employees will eventually want to move on and take another job. However, if they sign a covenant not to compete, they give up their rights to work for a competing company. The terms of this limitation are generally outlined and can include not working in a certain geographic location for a specific period of time.

Keeps them from poaching customers

Employees can’t poach any of the customers that they obtained once they leave the company that hired them if they signed a covenant not to compete agreement. If they get caught trying to contact their former customers in order to gain their business, they can face legal ramifications as well. Even if the customers reach out to the former employee on their own, it may still turn into a legal issue.

Before an individual signs a covenant not to compete, they do need to take into account the ramifications of doing so. It may seem like a good idea at the time as it will allow them to work for a specific company, but it may have a huge impact once they decide to leave the company to look for a different job.