What are the laws and regulations in Pennsylvania regarding non-compete agreements for employees?

In Pennsylvania, non-compete agreements for employees are governed by common law and statutory law. Non-compete agreements are contracts between an employer and an employee in which an employee agrees not to compete with the employer after leaving the company for a certain period of time, within a specific geographic region and/or within a particular industry.

Under Pennsylvania law, non-compete agreements are generally enforceable if they are reasonable in scope and duration, designed to protect legitimate business interests, and supported by adequate consideration. Legitimate business interests may include trade secrets, confidential information, customer goodwill, and unique or specialized skills or training.

Pennsylvania courts typically analyze the reasonableness of a non-compete agreement according to the following factors:

1. The duration of the restriction;
2. The geographic scope of the restriction;
3. The specific activities prohibited by the agreement; and
4. The employer's legitimate business interests.

In determining whether the restrictions are reasonable, Pennsylvania courts apply a balancing test that weighs the employer's interests in protection against the employee's interests in earning a living.

Pennsylvania law also requires that non-compete agreements be supported by adequate consideration, which means that the employer must provide the employee with something of value in exchange for the employee's agreement to the restrictions. Adequate consideration may include a promotion, a salary increase, or additional training or benefits.

There are some exceptions to the enforceability of non-compete agreements in Pennsylvania. For example, a non-compete agreement will not be enforced if it is unconscionable, if the employee is terminated without cause, or if the employer engaged in wrongful conduct. Additionally, certain professions, such as doctors and attorneys, may be exempt from non-compete agreements under certain circumstances.

If an employer seeks to enforce a non-compete agreement, the employee may be entitled to seek legal action to have the agreement declared unenforceable. If an employee is unsure about the enforceability of a non-compete agreement, they should seek legal counsel for further advice and guidance.

In summary, non-compete agreements in Pennsylvania are generally enforceable if they are reasonable in scope and duration, designed to protect legitimate business interests, and supported by adequate consideration. However, there are exceptions and limitations to their enforceability, and employees should seek legal advice if they have concerns about a non-compete agreement.