Attention Lawyers: Here's a free-market solution to the problem that 2010 Georgia Amendment 1 tries to fix

When somebody wants to amend the state constitution, you figure there's been some horrible injustice that needs to be fixed right at the top. Today, you'll find the amendment on the 2010 Georgia ballot:

Shall the Constitution of Georgia be amended so as to make Georgia more economically competitive by authorizing legislation to uphold reasonable competitive agreements?

(__) Yes

(__) No

Sounds great, right? Who wouldn't want Georgia to be more competitive.

Unfortunately, the wording of the ballot question is a huge deception, and you should read more about why you should #VoteNoOn1 all over the internet.

From what I understand, the original impetus behind this proposal was to correct an actual problem that occurs in Georgia related to employment contracts.

From an AJC article about the amendment:

A Georgia businessman thought he had an ironclad non-compete agreement with a new employee he hired to handle sales at his company. The employee had access to confidential information about customers, and the agreement prohibited her from soliciting those customers.

But while the court found the confidentiality agreement was valid, it voided the non-compete agreement because a clause in another section didn't give a time frame for the non-compete agreement as required -- even though the time frame of two years was referenced in another clause, said Shawn Anton Kachmar, the lawyer who represented the businessman.

Clearly this is an unfortunate result for the businessman in question -- he thought ahead enough to create an employment contract, but he didn't know it might be overturned in court. Maybe he used a lawyer to write the agreement -- if so, this sounds a lot like legal negligence or malpractice. But trying to prevent the situation (an employer that had a poorly-written employment contract) above by changing the foundation of how employment contract law works in Georgia is not the way to do it. Rather, I propose a market-based solution.

When a company asks an employee to sign an employment contract, the core reason for the agreement is that the company doesn't want the employee to leave and either steal customers that he formed a relationship with or help a competitor advance their product. Both of these are pure monetary problems; if the employee breaks the employment contract, there are monetary damages that the company would suffer. The recourse for the company in the case of a broken employment agreement is probably monetary (although I suppose in some cases the courts could make the employee quit the new job, but I doubt the courts work fast enough for that to matter much). The trick here is that no one knows if the employment agreement will be held up in court until it goes to court. But the law firm that wrote the contract should have a very good idea of whether it will hold up.

What I propose is that law firms start offering employment contracts along with insurance. Instead of paying say $500 to draft an employment contract, the company would pay maybe $1000, and this would include some insurance. If the employee leaves and violates the employment contract, the law firm would sue the employee, and if the employment agreement is thrown out, the law firm would have to pay out a claim to the company. It's basically a little malpractice insurance wrapped up with an employment agreement. But it's a market solution that should have the effect of reducing the number of unenforceable employment contracts in the state while increasing profits for law firms. That sounds like a free market win-win to me.