What are my legal options if a former employee breaches their non-compete agreement and opens a competing business in Pennsylvania?
If a former employee breaches their non-compete agreement and opens a competing business in Pennsylvania, there are a few legal options available:
- Enforcing the non-compete agreement: The first option is to enforce the non-compete agreement the former employee signed. A non-compete agreement is a legal contract where an employee agrees not to compete with their former employer for a set period of time and within a certain geographic area. If the former employee has opened a competing business in violation of this agreement, the employer can file a lawsuit and seek an injunction to prevent the former employee from continuing to compete. In Pennsylvania, non-compete agreements are generally enforceable if they are reasonable in duration and geographic scope and necessary to protect the employer's interests. However, enforcing a non-compete agreement can be complex and expensive, and the employer must prove that the former employee violated the agreement.
- Suing for damages: Another option is to sue the former employee for damages caused by the breach of the non-compete agreement. The employer can seek compensation for lost profits, customers, or other damages resulting from the former employee's competing business. In Pennsylvania, the measure of damages for a breach of a non-compete agreement is typically the losses suffered by the employer as a result of the employee's competition.
- Negotiating a settlement: Finally, the employer can try to negotiate a settlement with the former employee. This can involve a payment of money or other concessions from the former employee to compensate the employer for the breach of the non-compete agreement. Negotiating a settlement can be a cost-effective way to resolve a dispute without going to court, but it requires agreement from both parties.
There are certain limitations to enforcing non-compete agreements in Pennsylvania. Non-compete agreements cannot be overly broad or unreasonable in duration, scope or geographic area, as they may be deemed overly restrictive and thus unenforceable. Additionally, Pennsylvania courts may revise an overly broad non-compete agreement and enforce only the reasonable provisions.
In summary, if a former employee breaches their non-compete agreement and opens a competing business in Pennsylvania, an employer has several legal options including enforcing the non-compete agreement, suing for damages, or negotiating a settlement. It is advisable to consult with a licensed attorney experienced in employment law to determine the best course of action for the particular situation.