Category: Non-Compete Agreements

Key Takeaways

• Pennsylvania courts may enforce a non-compete agreement that protects a legitimate business interest and has reasonable limits.
• An employer that introduces a non-compete after employment begins generally must offer a new benefit in exchange for the employee’s agreement.
• Pennsylvania law provides additional protections for certain health care practitioners.

A non-compete agreement may be enforceable in Pennsylvania if it is connected to an employment relationship, supported by adequate consideration, and reasonably limited to protect an employer’s legitimate interests. To determine enforceability, courts look at both the contract and the circumstances in which the employee agreed to it. 

What Is a Non-Compete Agreement?

A non-compete agreement restricts a person’s ability to work for a competitor, start a competing business, or perform certain work after leaving an employer. The agreement may appear in an offer letter, employment contract, or separate document.

Pennsylvania courts generally disfavor non-competes because they can interfere with a person’s ability to earn a living, although they will nevertheless enforce some restrictions that meet the state’s requirements. 

What Interests Can an Employer Protect?

An employer must have a legitimate interest (such as protecting confidential business information, customer relationships, or goodwill developed through the business) in restricting an employee’s future work.

For example, an employer might seek to protect relationships with customers an employee served on the company’s behalf. 

How Do Time, Location, and Job Duties Matter?

Courts consider whether a non-compete is reasonably limited in duration and geographic reach, as well as whether the limits and the work the agreement prohibits are necessary to protect the employer’s interests. 

When reviewing an agreement, consider the following:

• How long does the restriction last?
• Does it cover an area where the employee worked or had customer relationships?
• Does it prohibit competing work or prevent the employee from taking unrelated positions?
• Does the scope reflect the employee’s responsibilities and access to information?

What Must an Employee Receive for Signing?

“Consideration” is the value that an employee receives in exchange for agreeing to a restriction. When a non-compete is part of the original employment arrangement, the job itself may provide consideration.

However, if an employer introduces a new restriction after employment begins, continued employment alone is generally not sufficient consideration. The employee generally must receive a new benefit, such as a raise or promotion connected to the agreement. 

Do Different Rules Apply to Health Care Practitioners?

Yes. Pennsylvania’s Fair Contracting for Health Care Practitioners Act places additional limits on certain non-competes involving covered practitioners, which includes physicians, physician assistants, certified registered nurse practitioners, and certified registered nurse anesthetists.

For covered agreements entered into after the law took effect on January 1, 2025, the law generally permits enforcement only if the restriction lasts no more than one year and the employer did not dismiss the practitioner. 

Frequently Asked Questions

Does being fired make a non-compete unenforceable?

Not necessarily. The reason employment ended is one circumstance to review, and special statutory protections apply to certain health care practitioners who were dismissed. The contract’s terms and applicable law also matter. 

Can a court enforce only part of a non-compete?

A court may sometimes limit an overly broad restriction and enforce the portions reasonably necessary to protect the employer. Partial enforcement is not automatic. 

What should I do before accepting a competing job?

Gather your employment agreement, any amendments, your offer letter, and relevant correspondence. Have a lawyer review the restrictions and the proposed role before you decide whether to accept. The answer will depend on the agreement’s language and the circumstances surrounding it.

Philadelphia Employment Lawyers at Sidkoff, Pincus & Green P.C. Are Ready to Discuss Your Non-Compete Agreement

If you are considering a new position or seeking to enforce an agreement, contact the Philadelphia employment lawyers at Sidkoff, Pincus & Green P.C. Our Philadelphia office can review the restrictions and discuss how it applies to your situation. Call us at 215-574-0600 or complete our online form today for a confidential consultation. Our office is in Philadelphia, and we serve clients in Pennsylvania and New Jersey.