Philadelphia Non-Compete Lawyers
At Sidkoff, Pincus & Green (“SPG”), our non-compete lawyers in Philadelphia routinely litigate, draft, review and negotiate non-compete agreements and other restrictive covenants in matters concerning Pennsylvania law. When parties are involved in litigation concerning restrictive covenants, there are often equitable (non-monetary) claims and requests for injunctive relief. In these circumstances, litigation may be fast-paced and require attorneys who are knowledgeable about the law and prepared to act quickly.
Pennsylvania Non-Compete Law and Other Restrictive Covenants
Restrictive covenants, of which non-disclosure and non-competition agreements are the most frequently utilized, are commonly relied upon by employers to shield their protectable business interests. The non-disclosure covenant limits the dissemination of proprietary information by a former employee, while the non-competition covenant precludes the former employee from competing with his prior employer for a specified period of time and within a precise geographic area. In Pennsylvania, restrictive covenants are enforceable if they are: (1) ancillary to an employment relationship between an employee and an employer; (2) supported by adequate consideration; (3) the restrictions are reasonably limited in duration and geographic extent; and (4) the restrictions are designed to protect the legitimate interests of the employer. Pennsylvania law permits equitable enforcement of employee covenants not to compete (such as injunctions) only so far as reasonably necessary for the protection of the employer. However, restrictive covenants are not favored in Pennsylvania and have been historically viewed as a trade restraint that prevents a former employee from earning a living.
Some additional factors to consider:
- There must be consideration for the restrictive covenant. The law provides that a restrictive covenant, regardless of whether it is reasonable, will not be enforced if no consideration was exchanged for its execution.
- When the restrictive covenant is contained in the initial contract of employment, the consideration is the job itself. However, when the restrictive covenant is added to an existing employment relationship, the employee must receive a corresponding benefit or a change in job status. Sufficient new and valuable consideration has been found to include such things as a promotion, a change from part-time to full-time employment, or even a change to a compensation package of bonuses, insurance benefits, and severance benefits.
- The presence of a legitimate, protectable business interest of the employer is a threshold requirement for an enforceable non-competition covenant.
- A restrictive covenant may be enforced even if an employee is terminated by an employer; and the fact that an employee was fired without reason, standing alone, will not prevent a non-compete from being upheld. However, an employee’s termination without cause is a factor that will be considered in determining whether there is a legitimate business interest. If an employer deems an employee as worthless, the need for protection is diminished by the fact that the employee’s worth the company is presumably insignificant.
In addition to its Pennsylvania non-compete agreement and employment law practice, SPG also frequently represents clients in a wide variety of business litigation matters including contractual disputes, business torts, shareholder claims and lawsuits involving intellectual property.
If you have any questions concerning the enforceability of a restrictive covenant, or are looking for representation in employment or business litigation, please contact Sidkoff, Pincus & Green by phone at (215) 574-0600 or via email at [email protected], or submit an online inquiry.