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?
Whether or not a judge will conclude that the covenant is enforceable can be difficult to know beforehand. 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. Covenants not to compete that a court will categorize as unreasonable include provisions that last for a long duration or that restrict the employee to an unreasonable geographic area around Philadelphia County.
Covenants not to compete are also required to deal only with competitors who are rationally related to the employer's line of industry. Lastly, the employer must have a valid business interest behind its motivation for mandating a covenant not to compete.
Do I Need an Attorney when Dealing with a Covenant not to Compete?
Before you sign any documents that could restrict your rights, you may consider hiring a Philadelphia County, Pennsylvania attorney who can review the covenant. The attorney can negotiate modifications to the contract if they are needed, and can draft a new clause which is acceptable to the parties involved. Attorneys can provide valuable counseling to employers who are considering suing an employer who breached a covenant not to compete. They can also assist employees who have signed an agreement limiting their employment options.