Practice Areas

Contract Law

Contract Terms and Benefits

Often employees, especially senior managers, are presented with complex employment agreements prior to accepting a new position. Also, many times following a lay-off, a reduction in force, or an involuntary separation, an employee may be faced with deciding whether to accept a detailed severance package. Some of common issues which we have seen are those involving:

Non-Compete Agreements

Non-compete agreements are becoming more common by the day. Currently we are finding these clauses in employment contracts, separation agreements, severance agreements and settlement agreements. Many states, including Georgia, dissect these clauses very carefully to determine its enforceability. Georgia in particular, has been very protective of an employee’s constitutional right to be free of illegal restraints of trade. Non-compete clauses must meet strict standards prior to a court declaring the agreement to be enforceable. When determining whether a Non-compete will pass muster, Courts will search for and weigh the following: duration, breadth, geographic scope and customer contact.

Non-Solicitation Agreements

Non-solicitation agreements, sometimes referred to as non-raiding clauses, also appear in separation agreements and employment contracts. This type of a clause can take two forms: external and internal solicitation. This type of an agreement is generally triggered at the end of the employment relationship. Ultimately, this type of an agreement will survive or fall by word choice and the voice in which the drafted agreement speaks.

Non-Disclosure Agreements

Non-disclosure agreements vary greatly from field to field and from company to company. This type of a restriction is the broadest of the restraints on employment that an employer may choose to utilize. Trade secrets are typically the type of information that an employer will attempt to protect from dissemination. Along the same lines state legislators have enacted legislation to protect the trade secrets of businesses even in the absence of an enforceable Non-disclosure agreement. The largest concern in dealing with this type of agreement or statutory enactment is determining if the information that is being protected is in fact a Trade Secret.

Confidentiality Agreements

Confidentiality agreements are usually seen in tandem with one or all of the above. This type of agreement is generally designed as a catchall or an attempt to protect information that may potentially slip through the any of the above provisions. In order for information to be deemed confidential information, the company must treat the information as confidential and not freely distribute what is claimed to be confidential. Subsequently, a company may not simply refer to all information as confidential to attempt to protect its use by former employees. These agreements must also be tailored in a way to achieve the goals of the company without being so broad as to unfairly restrain the future employment of the individual.

Totality of the Agreement

Viewing the non-compete, non-solicitation, non-disclosure and confidentiality agreements together may change the nature and legality of the agreement as a whole. Similarly, some clauses may rise and fall together, while others may be blue penciled by the judiciary at a later date to maintain enforceability.

Erisa and Employmee Benefits

The Employee Retirement Income Security Act (“ERISA”) governs most employee benefit plans. Managers, executives, officers and other employees of a corporation should utilize the provisions of ERISA to become educated about their benefit plan options. Some of the plans covered by ERISA are Employee Stock Option Plans (“ESOP”), Profit Sharing Plans, Flex Plans, Cafeteria Plans, Major Medical Plans, Retirement Plans and other employee benefit plans. In some cases, an employer may provide early retirement or separation pay options to an employee at the end of the employment relationship. The early retirement or separation pay options that may be presented to the employee, especially at a time of separation, may not be easily understood or clear.

Pension and benefit issues can arise even after an involuntary separation.

All of these agreements and benefits are very fact intensive and industry specific. If you have questions or concerns about the legality of your agreements or the determination of your benefits please contact our office.


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