Thursday, October 14, 2010

Philadelphia Area Lawyer on Pennsylvania Non-Compete Agreements



Philadelphia Area Non-Compete Lawyer With Offices in Paoli (Main), King of Prussia, Exton, Radnor, Plymouth Meeting and Center City

Here are several basic propositions to keep in mind.

WHAT STATE LAW GOVERNS MY NON-COMPETE AGREEMENT?

Nearly every non-compete agreement contains a "choice of law" provision.  This provision will set forth the state law under which the agreement is to be decided. These provisions are almost universally enforced by all courts.  The choice of law provision is important, because different states have different rules for how a non-compete may be enforced.  The language to look for is something like this:  "The parties agree that this Agreement will be enforced in accordance with the laws of [state]."  If the state that is referenced is Pennsylvania, then this Blog is for you.  If it is another state, then this Blog be of little help to you.

NON-COMPETE AGREEMENTS SIGNED AT THE OUTSET OF YOUR EMPLOYMENT ARE ENFORCEABLE IN PENNSYLVANIA

First, if your non-compete is signed by you at the commencement of your employment, it will be enforceable in Pennsylvania under many circumstances. 

EXCESSIVE GEOGRAPHIC REACH OR DURATION OF TIME ARE NOT GOOD DEFENSES TO A NON-COMPETE AGREEMENT IN PENNSYLVANIA

Forget getting out of the non-compete because it is for too long a period of time, or because it contains too broad a geographic restriction. Those are arcane defenses that do not work in the modern world.  Further, if a Pennsylvania court believes the non-compete is overly broad, it simply "blue pencils" the agreement by reducing the time period or geographic scope but otherwise upholding the agreement.

I SIGNED THE NON-COMPETE AGREEMENT UNDER DURESS IN PENNSYLVANIA, IS IT ENFORCEABLE?

Also, forget the argument that you signed the agreement "under duress."  In 20 years, I have never seen or heard of a successful duress argument in the non-compete area.

IS A NON-COMPETE AGREEMENT THAT I SIGNED AFTER I STARTED WORKING ENFORCEABLE IN PENNSYLVANIA? 

If your employer has you sign a non-compete agreement after your employment has already started (say more than a month after your employment has started), it is enforceable only if you were given additional consideration (bonus, pay raise, promotion, stock options, etc.) in exchange for your signing the agreement.

I WAS FIRED FROM MY JOB - CAN MY FORMER EMPLOYER ENFORCE MY PENNSYLVANIA NON-COMPETE AGREEMENT?

Third, if you are fired for poor performance, or as part of a reduction in force, the non-compete is generally not enforceable under Pennsylvania lawHOWEVER, just because you are fired does not automatically mean your non-compete is unenforceable.  If you are fired because the employer truly believes you did something wrong (breach your duty of loyalty by starting a new business, coming in late time after time, being insubordinate, repeatedly violating a work rule, etc.), the non-compete remains viable and enforceable.

NOTE:  If you believe your employer is purposefully and intentionally making up a reason to fire you so that it can in the future enforce your non-compete (employers have lawyers, too!), the best way to flush that out is to have an attorney represent you at an Unemployment Hearing.  You can then use the record created at the Unemployment Hearing to prove the "real" reason for your termination in any subsequent non-compete dispute.

Additional questions about non-compete Agreements in Pennsylvania?  Click Here.

John A. Gallagher is an Experienced Non-Compete Attorney Who Has Litigated Non-Compete Lawsuits in Chester County, Delaware County, Montgomery County and Philadelphia County

Understanding your chances of winning a non-compete lawsuit and cost containment are two of the largest obstacles facing an employee who is facing or involved in a non-compete lawsuit.  If you are concerned about a non-compete agreement, you may want to discuss the matter with legal counsel before taking steps that may unnecessarily instigate your former employer, or undermine your case later.

Click Here if you have questions about any aspect of employment law, from wrongful termination, to wage and overtime claims, to discrimination and retaliation laws, to Family and Medical Leave…

Click Here if you have questions about any aspect of Pennsylvania Unemployment Law, from willful misconduct, to voluntary quit, to Referee Hearings, to severance issues…

Click Here to e-mail John directly.

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