CHESTER, DELAWARE, BUCKS AND MONTGOMERY COUNTIES
WITH NON-COMPETE AGREEMENTS
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Philadelphia employment law firm the Gallagher Law Group, P.C. assists Pennsylvania employees located in towns such as Ft. Washington, Souderton, Radnor, King of Prussia, West Chester, Doylestown, Exton and Lansdale review and negotiate Employment Contracts. Located in Chester County, Mr. Gallagher will provide an evaluation of your Employment Agreement for a reasonable flat fee and will provide guidance on how to minimize the impact of Non-Compete Covenants while maximizing protection from termination without cause often suffered by At-Will Employees.
In Pennsylvania, if You Have a Non-Compete Agreement and Solicit Former Clients or Customers, You Are Asking for Trouble
If you have an Employment Agreement that includes Confidentiality, Non-Competition and Non-Solicitation covenants, and nevertheless go to work for a new company that competes with your former employer, you will likely be all right UNLESS you use Confidential Information misappropriated from your former employer prior to your departure and/or you solicit new business from clients you serviced while in your previous job.
Why is that?
Pennsylvania courts generally do not want to enforce non-compete agreements against Joe/Jane Average Employee simply because he/she is working for a competitor of his/her former employer.
|Leave Your Employer's Confidential Information Behind|
You May Want to Take a Look at Our Video Discussing Pennsylvania Law Regarding Non-Compete Agreements.
In fact, non-compete agreements are enforced only where doing so is necessary to protect the legitimate business needs of the former employer.
|Misappropriation and Solicitation Cast |
Dark Shadow on One's Character
|Soooo good. And so Very Secret!|
Are My Former Employer's Customer Lists, Business Forms and Marketing Materials Trade Secrets Under Pennsylvania Law?
Generally the answer is NO.
In 2015, Pennsylvania's Superior Court issued a decision construing Pennsylvania's Uniform Trade Act, and held that "customer information, contracts and prices were not trade secrets....[because] competitor[s] could obtain the information be legitimate means."
However, you should not take any of your former materials (whether written or in digital format) with you when you leave the job, nor should you use any of them when you start your new job. Such Confidential Information is your employer's property, and misappropriation of same is a prescription for trouble.
|That Midnight Download of Your Employer's Customer List |
Onto a Thumbdrive Will Not Go Undetected
If you do so and are found out, a court will deem you "untrustworthy" and will enforce your non-compete even if you are not soliciting customers of your former employer.
Indeed, if an ordinary employee has engaged in aggressive, subversive behavior that suggests the employee is intent upon "stealing" business from his/her former employer by any means necessary.
Question? Click Here to e-mail John directly.
How Do I Know What State's Laws Apply to My Non-Compete Agreement?
|What Law Applies?|
This is usually spelled out in the contract. Click Here to learn more. Otherwise, the law of the state in which the contract was signed and/or performed will control. It is important for you to determine what state's laws govern your contract before selecting a lawyer to help you.
Under Pennsylvania Law, Soliciting Clients or Customers of Your Former Employer Does Pose a Threat to Your Former Employer's Legitimate Business Interests
|Indirectly = No Straw Parties|
Why? Well, the overwhelming majority of non-compete agreements contain non-solicitation clauses that prohibit the solicitation of former customers. And, while merely working for a competitor of your former employer is not going to cause them provable harm (no matter how wonderful you are), taking their customers will cause them provable financial harm and loss of good will. Courts will not countenance that, and your next stop will be a Preliminary Hearing wherein your former employer will seek to obtain a court Order prohibiting you from continuing on in your current business endeavor.
If evidence of misappropriation and use of Confidential Information coupled with solicitation of your former employer's customers surfaces at that Hearing, such an Order will usually follow.
So, my advice is, stay away from those former customers!
Suppose a Customer of My Old Company Contacts Me and Wants to Do Business With My New Company? Is That a Violation of My Non-Solicitation Agreement?
Yes, it is. There is simply no way around a non-solicitation agreement. Even if you can prove that the customer called you first, and said that it was going to stop doing business with your former employer, and wanted you to start handling its business, you will still be held to have violated your non-solicitation agreement. including the customer's choice.
Moreover, you cannot get around this problem by using a third-party, a straw person if you will, to solicit those former customers on your behalf. Almost all non-solicit agreements clauses say that you cannot "directly or indirectly" solicit former customers. Using a straw person is exactly what they mean by "indirectly."
|Direct and Indirect Solicitation Prohibited|
What resources, you ask. Compensation to employees, development of the product or service sold by the company, providing the sticks, bricks, inventory, equipment and machinery to outfit the company's office(s), marketing the company, paying for expenses associated with overhead, etc.
|Frank worked for White Cow Milk For 20 Years; He Knew All of the Ladies in the Neighborhood Very Well. |
When Wawa Hired Him Away, Who Do You Think Mrs. Crabtree Wanted to Deliver Her Milk?
Absent a non-compete contract containing a non-solicitation covenant, customers are free to follow an exiting employee to wherever he/she goes. And, employees with such a loyal following therefore have a great deal of value in the open market.
However, the customer's understandable wishes will be frustrated by a non-solicitation agreement. Courts will almost always enforce a non-compete agreement with a non-solicitation clause if there is any evidence that the former employee has attempted to or is actually doing business with a customer of his/her former employer.
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John A. Gallagher is an employment attorney who represents employees who need an employment lawyer in the Philadelphia area, including individuals who live or work in Philly or nearby communities such as Chester County, Delaware County, Montgomery County, Bucks County, Berks County and Lancaster County.
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Have questions and need a legal opinion regarding Pennsylvania Unemployment issues such as Willful Misconduct or seeking legal representation for a Pennsylvania Unemployment Referee Hearing, feel free to send me an e-Mail or give me a call; I will provide a brief analysis of your issue and/or chance for winning at no charge.
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