There is now considerable discussion in Georgia's legal community and Legislature as to the effective date of the new Georgia non-compete law, HB 173 (the "Act"), which I discussed in my earlier article "Georgia Law on Non-Compete Agreements Is Revised."
Most hold that the intent of the Legislature was to make the Act effective on November 3, 2010—the day after the constitutional amendment was passed by the voters. However, the amendment did not state when it would take effect. There is a growing consensus that the amendment will not become effective until January 1, 2011, and that the Act is unconstitutional until the amendment takes effect.
Some have expressed concern that, because of that gap, the Act is invalid and will require a fix by the Legislature once the session begins in January. Opponents of the Act may argue that this defect cannot be resolved.
As a result, lawyers are advising clients to wait at least until January 1, 2011, to make any changes to their non-compete, non-solicitation, and non-disclosure agreements (also known as "restrictive covenants") or, preferably, until the Legislature passes a fix (if it is determined that one is needed) that is signed by Georgia's governor.
The expectation is that any needed fix will be passed and signed relatively quickly. However, legislative opponents are already considering how they can derail the Act entirely. A lively debate is expected.
Additionally, as I stated in my earlier article, the validity of the Act and its interpretation will most certainly be challenged in cases down the road.