Pro & Con, Amendment 1: Shall voters change workplace noncompete agreements?

YES: Current law can allow employees to leave with privileged information.

By Cynthia Reichard

The proposed Amendment 1 to the Georgia Constitution makes sense for businesses and their employees. Here’s why I’m voting “yes.”

Success in any business depends on trust and mutual respect between employees and executives. In our company, it’s never “us” vs. “them.” To do well, we must work together as a team. In this difficult economic time, our company has made large sacrifices to ensure that not one person lost a job. Employees have responded by investing the creative work essential to the company’s continuing growth.

Success in our company is also dependent on managing confidential information, especially ingredients and formulas for our fragrances and flavors, and relationships with suppliers and customers around the world. This is why we have confidentiality contracts with about 15 of our key employees. If one of them walked out the door with privileged information, the rest of us — more than 80 employees and executives — could be harmed. It’s unthinkable that we would spend tens of thousands of dollars on developing new technologies and products only to stand by and watch the efforts everyone has made be stolen away by an unscrupulous competitor.

But writing employee contracts to protect against this in Georgia is difficult. Because of deficiencies in the old law, contracts have been complicated and subject to inconsistent interpretations. Even when both parties were in full agreement, we could not be sure the courts would honor our intentions. For some companies, the legal bills for defending their intellectual property have been a severe burden.

The new law cleans up the ambiguities of the old. It sets clearer guidelines to follow when writing the contracts. Just as important, it gives the courts some latitude to apply some common sense when interpreting those agreements. In the past, if one part of the contract was flawed, the entire agreement could be thrown out. In addition, it allows judges to protect employees from undue economic hardship as a result of a contract.

Some have suggested that the new law will reduce business competition. As an executive of a company in a very competitive industry, I can say the new law will do no such thing. In fact, the law specifically spells out that “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.”

Besides, no one is asking for less competition. We’re asking for a level playing field in which parties to employee contracts can be confident that the valuable property of the company will be protected, that employee rights will be preserved and that their mutual intentions will be honored.

If competition is an issue at all, it’s the competition with neighboring states that have had reasonable and enforceable laws for years. Think about it. If you manage a high-tech company that spends millions developing innovative products, how willing would you be to relocate to Georgia, where under existing law, someone could find loopholes allowing them to take hard-earned assets to a competitor? Georgia needs to eliminate that competitive advantage enjoyed by neighboring states.

Whenever I’m faced with a difficult situation in my company or family, I always ask, “What’s fair?” The old law was not fair to businesses or employees. The Legislature recognized that and overwhelmingly approved a change. Amendment 1 will ratify that change and let us get on with the task of expanding our businesses and increasing the number of good jobs in Georgia. That’s fair, and that’s smart.

Cynthia Reichard is executive vice president of Arylessence, a Marietta manufacturer.

NO: A new law will strangle employee rights and inhibit job changes.

By Edward D. Buckley and Tom Stubbs


Georgia voters soon will be asked to vote on an amendment to the state constitution that is intentionally phrased to deceive them. It reads: “Shall the Constitution of Georgia be amended so as to make Georgia more economically competitive by authorizing legislation to uphold reasonable competitive agreements?”

This language is a lie on its face. The amendment makes Georgia less competitive by shackling employees to businesses, and strangling the rights of employees to work for competitors or start new competing businesses. Employees of any kind, be they doctors, news people, engineers, mechanics or salespeople, should vote “no” to this radical change to our state constitution.

Amendment 1 relates to noncompete agreements. Employers already may force noncompete agreements on employees — as long as the agreements are reasonably limited in time, geography and job description. Under the Georgia Constitution, if an employer imposes unreasonable restrictions, such as banning former employees from working in their field of choice forever or everywhere or in all kinds of jobs, then our courts are required to strike the entire agreement.

That process encourages employers to err on the side of keeping the restrictions contained in noncompetes reasonable and limited.

Current law is not perfect, but it is far from the muddle that proponents of Amendment 1 make it out to be. While some noncompetes are occasionally overturned due to being overly broad, thousands of reasonably limited noncompete agreements are enforced without a hitch every year. Our constitutional protection against overly broad noncompete agreements has not deterred business-oriented publications such as Entrepreneur, Forbes, Chief Executive Magazine and others to rank Georgia consistently as one of the top states in the country for business.

Big business is not satisfied, however, and wants to erode even this minimal protection for employees. How? Amendment 1 — drafted by lawyers who work only for management — permits judges to edit, not just strike, overly broad noncompete agreements. This innocent-sounding change tilts the table on noncompetes to favor employers. If Amendment 1 passes, employers will be able to write every noncompete agreement too broadly, because there is no threat of the entire agreement being stricken anymore. The worst that can happen is that, at some distant time in the future, a judge may make the employer use more reasonable restrictions in its noncompete agreement. In the meantime, employers can require an employee to sign these overly broad agreements or get fired, then fire them anyway.

The argument that other states allow their judges to edit noncompete agreements doesn’t hold water. Many of these states have other laws affording protections for employees that Georgia does not offer. The power in these states of judges to edit noncompete agreements is balanced by these other employee rights.

The end result if Amendment 1 is approved? Overly broad noncompete agreements will dictate how and where many employees work. The economy loses because labor is prevented from flowing to the place where it is most productive. The gain? Our already clogged courts gain even more lawsuits, and our judges gain power to become activists who make up and insert completely new terms into contracts.

Georgians should not surrender their rights to make way for this one-sided, pro-employer and anti-employee law at any time. But at a time when unemployment is at record levels it is especially wrongheaded.

Edward D. Buckley practices law at Atlanta’s Buckley & Klein. Tom Stubbs practices law at his Decatur law firm.