In Pennsylvania, a covenant not to compete generally requires that, upon leaving the company, an employee agrees not to be employed by their employer's competitors. A covenant not to compete may also be called a "non-compete clause". Employees who sign them may either receive compensation or simply be required to agree as a condition for their employment.
When are Covenants not to Compete Unenforceable?
Foreseeing whether or not a judge will uphold a covenant not to compete is generally difficult. Even though the interests of an employer are important, Pennsylvania courts value a person's freedom to select the type of employment that they desire. Thus, courts will typically uphold only those covenants not to compete that they conclude to be reasonable. Those provisions that courts have seen to be unreasonable include those that last for an prolonged period of time or cover geographic areas around Delaware County that are unreasonably large.
Covenants not to compete are also required to deal only with competitors who are rationally related to the employer's line of industry. Lastly, there must be a legitimate business interest which motivates the employer's mandating a covenant not to compete.
Do I Need an Attorney when Dealing with a Covenant not to Compete?
A Delaware County, Pennsylvania lawyer can help you review the covenant before you sign any documents that might limit your rights. The lawyer can assist you in negotiating modifications or if needed, they can possibly draft a new agreement which will be acceptable to both parties. When it comes to suing an employee for breach of a non-compete clause, an attorney can give valuable advice. They will also be able to counsel employees who need advice for a covenant they have signed.