Employers often require new employees to sign agreements containing a non-compete covenant, which prevents an employee from working for or with a competitor within certain geographic bounds and for a certain amount of time after their employment with the company ends.
In Pennsylvania, such covenants are disfavored, but may still be enforceable when the restrictions imposed by the covenant are considered to be reasonably necessary for the protection of the employer, and are reasonably limited in duration and geographic reach. A non-compete covenant that is overly broad, in duration or geographic reach is considered unreasonable, and will typically be unenforceable. Unreasonableness is an affirmative defense which a defendant bears the burden of proving. See Victaulic Co. v. Tieman, 499 F.3d 227, 234 (3d Cir. 2007).
Courts must balance the employer’s legitimate business interest(s), the individual’s right to work, the public’s right to unrestrained competition, and the right to contract when determining enforceability of a non-compete covenant. See, WMI Group, Inc. v. Fox, 2015 Pa. Super. 25, 109 A.3d 740 (2015).
The determination of reasonableness, including duration and geography, depends largely on the specific facts and circumstances of each case. Generally, “legitimate business interests” include trade secrets, confidential information, good will, and unique or extraordinary skills. Victaulic, 499 F.3d at 235. A reasonable, enforceable covenant must be narrowly tailored to protect these interests so as not to favor the employer or the employee.
Philadelphia Non-Compete Lawyers of Sidkoff, Pincus & Green P.C. Advise on Drafting and Enforcing Non-Compete AgreementsPhiladelphia non-compete lawyers at Sidkoff, Pincus & Green P.C. protect employees’ right to work. For assistance in any type of employment law matter, call 215-574-0600 to schedule a consultation in our Philadelphia office, where we represent clients in Pennsylvania and New Jersey, or contact us online.