Restrictive Covenants for Technology Companies

By Shawn A. Kachmar, published in Business in Savannah.

All employers are faced with similar employment law issues: How should we conduct our hiring and screening process? When should an employee be disciplined or terminated? Can we conduct a pre-hire drug test? How should the employee be classified under the Fair Labor Standards Act for pay purposes? What types of conduct are prohibited in the workplace? What laws governing the workplace apply to us?

Technology companies, however, are confronted with several unique issues because of the rapid pace of innovation and change in the technology industry. Some of those issues include the retention of talented employees and the preservation of the company’s most valuable assets — the technology and intellectual property it is producing. Employee retention and the protection of a company’s intellectual property are often addressed through restrictive covenants and invention agreements. The laws governing these types of agreements vary widely from state to state. This article provides a brief overview of the types of covenants and agreements typically utilized by technology companies and a description of how they are interpreted in Georgia.

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