Enforcing Non Compete Agreements in Pennsylvania

Enforcing Non Compete Agreements in Pennsylvania

Non-compete agreements, also known as restrictive covenants, are contractual agreements that prohibit an employee from engaging in certain activities for a specific period of time after leaving their employment. These agreements are commonly used by businesses to protect their trade secrets, confidential information, and customer relationships.

Pennsylvania has specific laws governing the enforceability of non-compete agreements. It is essential for businesses to understand these guidelines and adhere to them to ensure that their non-compete agreements will be upheld in the event of a legal dispute.

First and foremost, non-compete agreements must be reasonable in scope and duration. Pennsylvania courts will not enforce agreements that are overly broad or excessively long. In general, non-compete agreements should only restrict an employee from working in a specific field or industry in which the employer operates and should not extend beyond two years.

Non-compete agreements must also be supported by consideration. Consideration is something of value that is exchanged between the parties to a contract, such as payment or a job offer. In the case of non-compete agreements, the consideration is typically the promise of employment or continued employment.

Furthermore, non-compete agreements must be supported by a legitimate business interest. Courts in Pennsylvania will only enforce non-compete agreements if the employer can demonstrate that there is a legitimate and significant business interest that would be harmed if the employee were to compete against them. This could include trade secrets, confidential customer information, or specialized training.

When it comes to enforcing non-compete agreements in Pennsylvania, employers should be aware that courts in the state are hesitant to enforce these agreements if they perceive them to be overly restrictive. Employees have the right to earn a living, and non-compete agreements that broadly restrict their ability to do so may be seen as a violation of this right.

In conclusion, non-compete agreements can be an effective tool for protecting a business`s valuable assets. However, it is essential for businesses to ensure that their agreements are reasonable in scope and duration, supported by consideration, and designed to protect a legitimate business interest. With careful drafting and adherence to Pennsylvania`s legal guidelines, businesses can increase their chances of successfully enforcing non-compete agreements.