PA Superior Court Strikes Down Non-Hire Clause

In the recent case of Pittsburgh Logistics Systems, Inc. v. BeeMac Trucking, LLC, No. 134 WDA 2017 (Pa. Super. Ct. 2018), the Pennsylvania Superior Court voided a non-hire clause contracted between two companies. The non-hire clause stated that the contracting companies could not hire each other’s employees. The non-hire clause put the burden of employment on the employers as opposed to a traditional non-competition agreement, which is a contract between an employer and its employee.

In this case, Pittsburgh Logistics Systems contracted with BeeMac, a competitor, an agreement with the following language:

“CARRIER agrees that, during the term of this Contract and for a period of two years after the termination of this Contract, neither CARRIER nor any of its employees, agents, independent contractors or other persons performing services for or on behalf of CARRIER in connection with CARRIER’s obligations under this Contract will, directly or indirectly, hire, solicit for employment, induce or attempt to induce any employees of PLS or any of its Affiliates to leave their employment with PLS or Affiliate for any reason.”

The Court gave several reasons why the non-hire clause was unenforceable, including: (1) the companies’ employees are put under hiring restrictions they never agreed to, (2) the employees received no consideration for being part of such a non-hire clause, which is usually required by a non-compete, and (3) the scope of the non-hire clause was not reasonable and necessary to protect the legitimate business interests of the company.

For more information, call Sidkoff, Pincus & Green at 215-574-0600 or contact us online. Our Philadelphia employment lawyers represent clients in Pennsylvania and New Jersey.