Generally Consist of 3 Covenants - Confidentiality, Non-Competition and Non-Solicitation
Is My Non-Compete Agreement Valid and Enforceable in Pennsylvania?
Need a Philadelphia Area Employment Lawyer Who Handles Non-Compete Cases?
We are routinely asked by folks who are currently employed to review Employment
Agreements containing Non-Competition and Non-Solicitation covenants (as well
as a Confidentiality clause). The most
common question we are asked?
“Is my Non-Compete enforceable?”
Typically,
these employees are either considering resignation to seek employment elsewhere or are concerned that they will soon be separated from their job involuntarily.
Under Pennsylvania law, and that of virtually every state, there are number of reasons why a Non-Compete provision may be unenforceable.
Non-Competes Are Unique Among Contracts
Courts Are Disinclined to Stop Someone From Working Absent Proof of Nefarious Conduct Causing Loss of Income to Former Employer
Ordinarily, if you have entered into a contract, you have agrees to buy/sell something or service for an agreed upon price. If one party fails to pay the amount due, or to provide the goods or services, a breach of contract claim will exist. As far as the remedy goes, it is easy to figure out. It is generally either the unpaid bill or the value of the goods or services (which is established by the amount the other party agreed to pay for same.
This is basic contract law, and easily understood by virtually anyone.
Cannot Prove Money Damages Without Loss of Business
In Order to Enforce a Non-Compete Agreement, Companies Generally Need to Prove Loss of Income (i.e. Money Damages)
When a former employee breaches a non-compete, however, damages cannot always be easily established. Consider:
* Employee violates non-compete by working for a competitor, but does not solicit any clients/customers of former employer. Former employer cannot prove any money damages.
* Employee violates non-compete by working for a competitor, and successfully solicits $100,000 in business from any clients/customers of former employer. Former employer can prove money damages, i.e. $100,000.
Those are facile examples, but you get the point.
That said, it is often the case that Non-Solicitation covenants are far more restrictive and problematic than are their counterparts. That is so because, while the courts in general do not
favor limiting the ability of the average worker to move from one job to another, they do protect employers from the loss of business when customers are taken by a former employee in violation of a Non-Solicitation covenant.
Employment Agreements Remain in Place Even if the Non-Compete Covenant is Void, Invalid and Unenforceable Under Pennsylvania Law
That said, it is often the case that Non-Solicitation covenants are far more restrictive and problematic than are their counterparts. That is so because, while the courts in general do not
favor limiting the ability of the average worker to move from one job to another, they do protect employers from the loss of business when customers are taken by a former employee in violation of a Non-Solicitation covenant.
Employment Agreements Remain in Place Even if the Non-Compete Covenant is Void, Invalid and Unenforceable Under Pennsylvania Law
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| Even Perry Mason Cannot Make an Employment Contract Simply Disappear... |
Focusing exclusively on the enforceability, vel non, of the restrictive covenants contained within your employment contract, however, misses the mark, unfortunately.
The principle thing to bear in mind, we often tell our clients, is this: whether the restrictions are enforceable or not, the Employment Agreement – and thus the restrictive covenants contained therein - will remain in existence. Only a court can declare a contract invalid and unenforceable.
Even the finest lawyer in all the land cannot make a contract vanish...so, when seeking new employment and faced with the interviewer's inquiry, "Do you have a Non-Compete," a truthful answer must be in the affirmative - irrespective of whether you have a legal opinion concluding the covenants are invalid and unenforceable.
The principle thing to bear in mind, we often tell our clients, is this: whether the restrictions are enforceable or not, the Employment Agreement – and thus the restrictive covenants contained therein - will remain in existence. Only a court can declare a contract invalid and unenforceable.
Even the finest lawyer in all the land cannot make a contract vanish...so, when seeking new employment and faced with the interviewer's inquiry, "Do you have a Non-Compete," a truthful answer must be in the affirmative - irrespective of whether you have a legal opinion concluding the covenants are invalid and unenforceable.
How Can I Negotiate My Non-Compete Agreement? Call 610-647-5027
Hence,
the trick is to negotiate the Agreement out of existence, or to at least
limit its scope, because prospective employers are very hesitant to hire
employees that have signed Employment Agreements containing Non-Compete and
Non-Solicit clauses – whether same appear to be unenforceable or not.
Negotiation is always possible. After all a contract is simply a memorialization of the parties' agreements and promises. They are always subject to amendment at the parties wishes.
The best approach varies from case to case; however everything a short-time employee does is crucial and subject to great scrutiny.
Hence, contacting qualified counsel prior to taking any steps towards the door is virtually essential.
The devil you know is better than that you don't. While you may not be able to negotiate everything you want, the certainty of knowing that you will be free to take a new job without fear of a lawsuit from your former employer is priceless.
Moreover, any company that is looking to hire you will appreciate knowing exactly how it may enlist you without fear of legal action.
Negotiation is always possible. After all a contract is simply a memorialization of the parties' agreements and promises. They are always subject to amendment at the parties wishes.
The best approach varies from case to case; however everything a short-time employee does is crucial and subject to great scrutiny.
Hence, contacting qualified counsel prior to taking any steps towards the door is virtually essential.
The devil you know is better than that you don't. While you may not be able to negotiate everything you want, the certainty of knowing that you will be free to take a new job without fear of a lawsuit from your former employer is priceless.
Moreover, any company that is looking to hire you will appreciate knowing exactly how it may enlist you without fear of legal action.
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HERE
ARE SOME OTHER ARTICLES YOU MAY FIND WORTHWHILE:
Are Non-Compete Agreements
Enforceable in Pennsylvania? How Can I Negotiate a Non-Compete?
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