Non-Compete Drafting

How much compensation must I pay for a non-compete?

Under Georgian law, you must pay at least the equivalent of the employee's salary for the entire duration of the restriction period (max 6 months post-employment).

Can I ban an employee from working anywhere in the industry?

No, the ban must be specific to direct competitors and specific roles. A broad ban preventing the employee from using their professional skills entirely is unenforceable.

What happens if I don't write the contract correctly?

If the contract violates the strict rules of the Labor Code (e.g., no compensation, too long duration), the court will declare the entire non-compete clause void, leaving your business unprotected.

Is a non-compete valid for all employees?

It is best used for key employees with access to sensitive data. Applying it to low-level staff without access to trade secrets is often considered unreasonable and unenforceable.

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It is critically important for businesses to protect their trade secrets, client base, and know-how from employees moving to competitors. A Non-Compete Agreement (NCA) is a legal instrument serving this purpose. However, the Labor Code applicable in Georgia imposes very strict requirements on such agreements. An incorrectly drafted clause is not only useless but may be declared void by a court. Therefore, employers need a qualified lawyer to draft an NCA that is legal, enforceable, and genuinely protects business interests.

Corporate and labor law specialists presented on the Legal.ge platform offer professional drafting of Non-Compete Agreements. This service includes:

  • Risk Analysis: Identifying positions (e.g., top management, sales directors, lead developers) where non-compete restrictions are essential to protect the business.
  • Formulating Valid Conditions: Precisely defining the restriction period (maximum 6 months), territorial scope, and field of activity so that it is considered "reasonable" in the eyes of the law.
  • Drafting Compensation Mechanisms: Determining the mandatory compensation amount and payment terms, which is the main condition for the validity of the agreement.
  • Integration into Employment Contracts: Harmonizing the NCA with confidentiality (NDA) and Non-Solicitation clauses.
  • Defining Penalties and Sanctions: Creating effective penalty mechanisms to prevent breaches.

Proper drafting of non-compete agreements is essential in scenarios such as: a bank hiring a corporate sales head who will have access to a VIP client database; an IT company employing a lead architect who knows the unique product code. In such cases, a standard "template" contract does not work. The lawyer must create an individualized condition balancing the company's protection interest and the employee's right to work, so that the court does not subsequently annul it.

According to the Labor Code of Georgia, an NCA is valid only if it is in writing and the employer undertakes to pay the former employee compensation during the restriction period (at least the amount of the salary). The lawyer's role is to ensure this compensation is calculated and documented correctly. It is also important to define what constitutes "competitive activity" — a general ban ("you cannot work anywhere") is void; the ban must be narrow and specific.

The process begins with studying the specifics of the business. The lawyer clarifies what specific information or connections the company wants to protect. Based on this, a draft agreement is created. Qualified drafting is the best prevention: when an employee sees a well-written, fair, and compensated restriction, they are less likely to risk breaching it.

On Legal.ge, you will find lawyers who will help you protect your business from unfair competition in full compliance with the law. Create a solid legal barrier to safeguard your intellectual property and clients.

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