Non-Compete Agreements Pennsylvania Law

Non-compete agreements are becoming increasingly popular in Pennsylvania, and they can be beneficial for both employers and employees. These agreements are legal contracts that the employer and employee sign, which outline the terms of employment and restrict the employee from working for any competitor of the company for a certain period of time after leaving the company.

In Pennsylvania, the enforceability of non-compete agreements is determined by the state`s courts, rather than state law. This means that courts will look at each individual agreement and examine whether it is reasonable and necessary to protect the employer`s legitimate business interests.

To be enforceable, non-compete agreements must meet several criteria. First, the agreement must be necessary to protect the employer`s legitimate business interests, such as trade secrets, confidential information, and customer relationships. Second, the restrictions in the agreement must be reasonable in terms of duration, geography, and scope. Third, the agreement must not be overly burdensome on the employee, and should not prevent them from finding suitable employment.

Courts in Pennsylvania have also established certain factors they consider when determining whether a non-compete agreement is enforceable. Some of these factors include:

– The length of the restriction

– The industry and geographic scope of the restriction

– The employee`s level of skill and knowledge

– The nature of the employer`s business

– The employee`s access to confidential information

It is important to note that non-compete agreements can only be enforced if they are signed before the employee starts working for the company or if they receive additional consideration beyond their regular salary, such as stock options or increased compensation.

In addition to non-compete agreements, Pennsylvania law also recognizes non-solicitation agreements, which restrict employees from soliciting customers or clients of their former employer for a certain period of time after leaving the company. These agreements are also subject to the same standards of enforceability as non-compete agreements.

Overall, non-compete agreements can be a useful tool for employers looking to protect their business interests and confidential information. However, employees should be aware of the terms of the agreement before signing, and should consult with a lawyer if they have any concerns about its enforceability.