What are the special rules for non-compete agreements in Pennsylvania?

On Behalf of | Jan 21, 2022 | employment contracts |

Non-compete agreements are something an employer may ask an employee to sign that creates a contract where the employee agrees to certain stipulations. These agreements prevent an employee from leaving one employer and going to work for another in the same field. They can help protect trade secrets and other confidential information.

According to the Printing Industries Alliance, Pennsylvania has specific rules governing the use of non-compete agreements to ensure fairness in the process.

Basic rules

The basic rule for non-compete agreements is they must be reasonable. The state requires a legitimate need to have such an agreement in place. They are only viable if their use protects the business secrets or other valuable information.

Timeline

State law says all non-compete agreements must include a timeline. The employer must give the exact time in which the agreement applies with a start and end date. It also must list out geographic limitations and restrictions.

Details

To ensure a document is enforceable, employers should make them as detailed as possible. Courts prefer something specific rather than something vague. The court will also ensure the agreement provides a benefit to both parties. The employee must receive something that makes it worth it to him or her to uphold the agreement. Keeping a job is not enough to provide something valuable in return.

The courts say employers must provide consideration even for agreements signed during employment instead of at the beginning. For this reason, it can be difficult to uphold an agreement signed during employment rather than when the employee is just starting in the position.