Pennsylvania Noncompete Agreement: What's Included and Enforceability

Quick Facts — Noncompete Agreement Lawyers

Is a Non-Compete Agreement Enforceable in Pennsylvania?

Yes. Non-compete agreements can be used by employers in Pennsylvania to protect confidential business information from prior employees.

The Supreme Court of Pennsylvania established specific requirements that must be met by all non-compete agreements in order for the contracts to be legally enforceable. These requirements include:

  1. The contract must be between parties that have an employment relationship.
  2. The restrictions are reasonably necessary to protect the employer’s interests.
  3. The restrictions are reasonable in regard to duration and geographic area.

Courts in Pennsylvania will also used a test called the “balance test” to determine whether a non-compete agreement is reasonable. Courts will consider the balance between the protection the non-compete affords the employer with the effects the agreement has on an employee attempting to earn a living.

How Long Does a Pennsylvania Non-Compete Agreement Last?

Courts in Pennsylvania have determined that two years is a reasonable amount of time for a non-compete agreement to last. Non-compete agreements can be made for longer, however if challenged, they are more likely to be ruled unreasonable and unenforceable.

How Do You Get Around a Non-Compete Agreement in Pennsylvania?

If an employee wants to get around a non-compete agreement or terminate the contract, they must prove to a court that the contract is unreasonable and imposes an undue hardship on the employee.

If a non-compete agreement in Pennsylvania doesn’t adhere to the rules implemented by the Supreme Court or doesn’t pass the balance test, it will be struck down.

What Voids a Pennsylvania Non-Compete Agreement?

All non-compete agreements must be backed by adequate consideration. In many states, continued employment is sufficient consideration for a non-compete. Pennsylvania however requires additional consideration. Additional consideration can include a change in status like a new job title, or additional compensation and benefits.

Frequently Asked Questions

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Anand A.

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Anand is an entrepreneur and attorney with a wide-ranging background. In his legal capacity, Anand has represented parties in (i) commercial finance, (ii) corporate, and (iii) real estate matters throughout the country, including New Jersey, Pennsylvania, Delaware, Arizona, and Georgia. He is well-versed in business formation and management, reviewing and negotiating contracts, advising clients on financing strategy, and various other arenas in which individuals and businesses commonly find themselves. As an entrepreneur, Anand is involved in the hospitality industry and commercial real estate. His approach to the legal practice is to treat clients fairly and provide the highest quality representation possible. Anand received his law degree from Rutgers University School of Law in 2013 and his Bachelor of Business Administration from Pace University, Lubin School of Business in 2007.

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Angela Hayden is an accomplished and driven attorney with a diverse professional background that sets her apart. Having served as a former Assistant Public Defender in Allegheny County, Angela acquired invaluable expertise in navigating the complexities of the criminal justice system. Her trial experience spans a wide range of cases, from minor retail theft to complex criminal homicide, demonstrating her ability to deliver successful outcomes for her clients. Prior to her focus on criminal defense, Angela honed her skills in public policy and political consulting through her work with both the Pennsylvania and United States House of Representatives. This experience provided her with a deep understanding of the intricacies of public policy and the ability to offer strategic guidance to clients. Angela's career also took her to a civil defense firm, where she traveled across the country, defending clients in litigation. This experience enhanced her ability to handle complex civil matters and strengthened her litigation skills. In addition to her expertise in criminal defense and civil litigation, Angela has demonstrated her proficiency in employment law, providing guidance and consultation to small businesses and non-profit organizations. Her keen insight into employment law matters ensures that businesses operate within legal boundaries while fostering a positive work environment. Furthermore, Angela is a licensed realtor, well-versed in residential real estate transactions. This additional knowledge allows her to offer comprehensive legal support to clients involved in real estate matters, ensuring their interests are protected throughout the process. Angela holds a degree from Hampton University and obtained her Juris Doctor from the University of Dayton School of Law. She is pursuing a Master of Business Administration. She is licensed to practice law in Pennsylvania and the District of Columbia, demonstrating her commitment to providing exceptional legal services in multiple jurisdictions. With her extensive experience and passion for achieving favorable outcomes for her clients, Angela Hayden is a dedicated advocate ready to guide you through your legal journey.

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Christopher Nuneviller has practiced in the securities, venture capital, corporate and emerging business sectors, and as a contract-advisor to the federal government, a federal government senior level executive, and as Army Judge Advocate. Like you, he also he is a partner in other business ventures and faces the same pressure to succeed, be profitable, and stay sane, all while making his clients, employees, family and business partners happy. As the managing partner for Philadelphia's MNB Meridian Law, Ltd., his focus is on assisting small and mid-sized businesses grow and thrive. As a business generalist, Christopher provides advice and counsel to businesses, their owners, investors and shareholders on matters ranging from formation, organization, governance, routine and special operations, and growth toward IPO. Christopher is also a former U.S. Army Judge Advocate having served seven years in Washington, D.C. where he gained significant experience with "above the fold" matters of great import and an unhealthy insight into the internal workings of the "beltway" underbelly. Mr. Nuneviller is admitted to practice in the Commonwealth of Pennsylvania, and before the Supreme Court of the United States, the Court of Federal Claims, and the Court of Appeals for the Armed Forces.

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Employee Rights

Noncompete Agreement

Georgia

Asked on Jul 4, 2023

How does a noncompete agreement work?

I am an employee at a small business and I have recently been asked to sign a noncompete agreement. I am not sure how these agreements work and what rights I have as an employee. I am also concerned about the restrictions that could be placed on me if I sign the agreement. I want to make sure I understand the implications of signing the agreement before I do so.

Nancy B.

Answered Aug 4, 2023

In its simplest terms, a noncompete agreement in an employment context is an agreement that says you will not compete with your former employer if you ever stop working for them. It typically forbids things like: + Working for a competitor + Starting a company that sells the same services/products as your employer + Recruiting employees from your current employer after you have left that employment. One thought is that this could be requested shortly before letting an employee go just to protect the company from competition but I hope that is not the case here as it seems like an unfair use of the noncompete agreement ability in Georgia. The issues are usually the geographical scope (for example within 15 miles of Dalton, Georgia), the time period (one or two years is usually sufficient and courts do not favor long noncompete agreements), and the consideration (such as a new job - which is not applicable in your case, or more compensation). Regards, Nancy A. Burnett

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Employment

Noncompete Agreement

Washington

Asked on Jul 25, 2023

Noncompete agreement and public policy?

I recently accepted a job offer with a new employer who asked me to sign a noncompete agreement. I am concerned that the agreement may not be in line with public policy and wanted to get a professional opinion from a lawyer to make sure I am not putting myself in a difficult situation.

Merry K.

Answered Aug 8, 2023

If you are in Washington State, where I'm licensed, as opposed to D.C., please let me know what kind of help you are looking for - have you already signed the agreement? I've been a WA State attorney for nearly 38 years, and specialize in employment law.

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Employment

Noncompete Agreement

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Asked on Jun 4, 2023

Noncompete agreement and industry restrictions?

I recently signed a Noncompete Agreement with my current employer. I am looking to explore other opportunities in my industry and want to know what restrictions my noncompete agreement might have on me. I am interested in understanding the limitations of the agreement and if there are any potential implications of taking a job in the same industry.

Danielle G.

Answered Jul 11, 2023

In order to ascertain the limitations and implications, you would need to review the specific language of the agreement. If the non-compete is very broad, it's possible it would not be enforceable. In New York, for a non-compete agreement to be enforceable, it must be for a reasonable period of time and limited geographic scope. It also must protect the employer's legitimate interest. For example, the restrictions must protect confidential information or specialized skills you gained while on the job, or some other legitimate interest. If the agreement goes beyond those limitations, a court could find the non-complete to be unreasonable and unenforceable, in whole or in part. As to what restrictions your specific non-compete imposes (and the reasonableness of those restrictions), you would need to look at the specific language in the agreement. If you are unsure about the limitations, you should seek advice of counsel to help decipher the extent it would apply to your industry in general, and the likelihood it would be enforceable in court.

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Employee Rights

Noncompete Agreement

Texas

Asked on Jun 3, 2023

Noncompete agreement and moonlighting?

I am an employee at a company that has recently asked me to sign a noncompete agreement. I am considering doing so, but I am concerned about whether or not the agreement would prevent me from taking on additional freelance work outside of my normal job. I am interested in moonlighting and need to know if a noncompete agreement would limit my ability to do so.

Curt L.

Answered Jun 6, 2023

If you moonlighting work is in the same business and same market, it is almost certainly prohibited by a noncompete agreement.

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Employment

Noncompete Agreement

Washington

Asked on Jul 11, 2023

Noncompete agreement termination options?

I recently left my job after signing a Noncompete Agreement. I am looking for a new job, but I am concerned about the restrictions in the Noncompete Agreement and how it might affect my ability to find a new job. I am looking for advice on my options for terminating or modifying the Noncompete Agreement so that I can find a new job without having to worry about any potential legal repercussions.

Merry K.

Answered Aug 15, 2023

I am a WA State employment attorney. If you didn’t receive anything in return for signing the non-compete, it may be relatively easy to get out of it. If, however, you signed in return for something, such as a severance package, it will be challenging to get out of the agreement. However, many non-compete agreements are written overly broadly and may not be enforceable under the laws of WA and other states. You may want to consult with a WA State employment attorney for a review of the documents and law(s) of the state(s) where you may want to work or set up a business. (A WA State attorney can only provide legal advice in WA, but can help you find applicable law/case decisions for other states but without providing anything beyond information, much like a law librarian).

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