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. Terms contained in a covenant not to compete will be struck down by a court as unreasonable if they bind the employee for an excessively long period of time or if they cover an unreasonably large geographic area around Erie County.
Covenants must also be limited to restricting dealings with those competitors that are rationally related to the employer's industry. Lastly, the employer needs to have an acceptable business interest which justifies their motives in requiring their employee to sign a covenant not to compete.
Do I Need an Attorney when Dealing with a Covenant not to Compete?
An Erie 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. A lawyer can also render useful advice for employers who are considering suing an employee for breach of covenant, or they can counsel employees who have signed such an agreement.