Here are some answers to some of the most common questions we are asked about non-compete agreements:
What is the Difference Between Non-Competition and Non-Solicitation?
Although commonly referred to as "non-compete agreements," these contracts typically contain 3
separate covenants of none: "Confidentiality," "Non-Confidentiality" and "Non-Solicitation." And each such covenant is treated differently under the law.
What Law is Used to Decide the Enforceability of My Non-Compete Agreement?
The majority non-compete agreement contains a "forum selection clause." Therein will lie your answer.
Can the Company Enforce My Non-Compete Agreement if I am Fired?
Under Pennsylvania law, if you are let go for poor performance, your non-compete covenant is not enforceable. Similarly, if you are laid off as part of a reduction in force, it will be difficult to enforce the non-compete. However, your non-solicitation obligation will likely remain in full force and effect under these circumstances.
Are Non- Competition Agreements Enforceable in Pennsylvania?
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| Target New Customers, Not Old |
Generally, Pennsylvania Courts do not enforce the non-competition component of such agreements if you are not interfering with your former employer's business. If you solicit former customers, however, they will nearly always enforce the non-solicitation component of such agreements.
So, in other words, if you bare an "average" employee and merely join a company that competes with your former employer, courts will be very hesitant to force you to quit your new job. However, if at your new job you solicit customers or clients that you serviced during your employment with your former employer, courts will generally enforce your non-compete agreement.
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| Nooks and Crannies = Trade Secret |
NOTE: If you posses trade secrets of your former employer, a Pennsylvania court will order you to stop working for its competitor even if you do not solicit any of its former customers.
NOTE: Arguing that your non-compete should be invalidated because it is for too long a duration or because it covers too broad of a geographic area, i.e. is "overly broad," will not work in Pennsylvania.
Avoiding the Solicitation of Your Old Clients or Customers is a MUST
In general terms, if you are bound by a non-solicitation provision, and nevertheless take business from your former employer, the Court will stop you by enforcing the non-solicitation component of your non-compete agreement. The key to avoiding problems with a non-compete agreement is you avoid taking any business from your former employer.
Does it Matter When I Signed the Non-Compete?
In general terms, if you are bound by a non-solicitation provision, and nevertheless take business from your former employer, the Court will stop you by enforcing the non-solicitation component of your non-compete agreement. The key to avoiding problems with a non-compete agreement is you avoid taking any business from your former employer.
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| When Did You Sign? |
In Pennsylvania, non-competition agreements are enforceable if they are entered into when you start employment. If you are required to sign a non-compete agreement months or years after you start employment, it will be enforceable only if the employer gives you "additional consideration," i.e. a raise, a bonus, a promotion, opportunity to participate in a stock option plan, etc. at the time that they have you execute the non-compete agreement.
Can I Negotiate My Non-Compete Agreement?
There are a lot of work arounds and negotiating tactics you can use to minimize the impact of a non-compete agreement. However, once you have "stepped in it," it becomes harder to extricate the former employee for a non-compete dispute. Therefore, it is better to consult with counsel first concerning the "dos and dont's" where non-competes are concerned before taking any major steps.
HERE
ARE SOME OTHER ARTICLES YOU MAY FIND WORTHWHILE:
Are Non-Compete Agreements
Enforceable in Pennsylvania? How Can I Negotiate a Non-Compete?
Non-Compete Agreements -
Legally Enforceable or Not, Negotiation is Often the Key
What State's Law Applies to My
Employment Contract? What is a Choice of Law Provision?
Recruiters and Non-Compete Agreements in
Pennsylvania
IT Consultants, Personnel Recruiters and
Non-Compete - Non- Solicitation Agreements in Pennsylvania
"Headhunters" and Non-Compete
Agreements in Pennsylvania - Some Things to Keep in Mind
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