In conclusion, do not automatically assume that your employee competition contracts disappear simply because you had to lay off your employees. Talk to a common law counsellor who knows the laws in the states where you operate in order to obtain a clearer picture of non-competition under the law of that jurisdiction. The issue of non-competition agreements is important for both employers and workers. For employers, it is very important to protect confidential or otherwise useful business information from unwarranted use by former employees or contractors. But workers also have important interests, including the right to earn a living without excessive restrictions from a former employer. In traditional employer-employee relationships, a non-compete clause is maintained where 1) an employment relationship between the contracting parties is essential, 2) restrictions on employer protection are reasonably necessary; and 3) restrictions are adequately limited in duration and geographic scope. Quaker City Engine Rebuilders, Inc. v. Toscano, 535 A.2d 1083 (Pa. That`s great. 1987) (internal citations are omitted) (emphasized).

Non-compete agreements related to the sale of a business: The courts recognize that parties who enter into agreements to sell a business generally have the same bargaining power and these agreements are treated differently, which is more likely to be applicable. The question also arises as to whether the Pennsylvania Supreme Court will uphold the Supreme Court`s decision. The Court has accepted the case for consideration and its decision will clarify the Pennsylvania Competition Ban Applicability Act. Try to negotiate competition bans for a year or less. Anything that is longer can affect your long-term career plans. In addition, negotiate for the non-compete clause to expire after one or two years of cooperation with the company. This means that after delivering your energies and talents to the company for a long time, you can go without being penalized. But what would happen if the non-competition contract was concluded after the start of the employment relationship? That`s the question the Pennsylvania Supreme Court dealt with last year in a case called Socko v. Mid-Atlantic. In Pennsylvania, to be applicable, a restrictive pact must meet three general requirements: in Pennsylvania, non-appeal agreements apply when the agreement passes to a working relationship between the employer and the worker; The agreement is based on compensation considerations that may include an initial job offer or a positive increase in employment conditions; The agreement is reasonably necessary to protect the legitimate interests of the employer; the agreement is proportionate in its duration and geographical scope. Historically, Pennsylvania law has not turned to treaties or alliances that seek to limit a person`s freedom to earn a living.

This reflects a long-standing common law rule that such agreements are generally unenforceable. The reason is that they oppose public policies of free competition and must therefore be considered non-astreigs. Try to limit geographic restrictions at the national level to a more local level or from a national level to a smaller radius. In today`s market, where there are so many online businesses, some companies want to extend their bans on competition online and across large geographic regions. This can significantly limit your ability to find a new job. Negotiate for the non-competition agreement to clearly specify penalties for infringement. In this way, the company cannot bring itself to pursue as aggressively as possible. In addition, try to have addressed all alleged violations with mandatory arbitration to save you from lengthy court proceedings if you are accused of violating the agreement.