It is particularly curious that our legislature would pass a law of this nature given the current state of the economy. Recent unemployment statistics place Georgia’s unemployment rate at ten percent, with over 450,000 Georgians out of work.[35] For those who are subject to restrictive covenants, the job market will be especially bleak. Overly broad restrictive covenants can have a chilling effect on former employees who may not know that the agreements they signed are unenforceable. This will also certainly make it more difficult for companies to recruit employees for their companies.
Moreover, by allowing judicial modification, the new legislation will encourage employers to draft extremely broad restrictive covenants, comfortable in the knowledge that if the enforceability of those covenants is ever challenged, the worst consequence is that a judge will enforce something more reasonable. From an employer’s perspective, if the referendum passes, there will no longer be an incentive to draft reasonably-tailored covenants from the outset, because employees will likely abide by the covenant’s overly restrictive terms without questioning its enforceability and, if not, the courts will enforce what they determine to be reasonable.
