A non compete agreement is a part of an employment contract that denies an employee the ability to work in a particular field for a specified time period after leaving an employer. Non competes are sometimes a part of a severance package, and other times they are used in attempts to control an employee’s movement from one job to the next. Not all non compete agreements are fair to employees, and not all are even enforceable in Pennsylvania courts. If your employment contract has a non compete clause, we strongly urge you to work with an attorney who can review your contract to protect your career and financial well being.
Employers Use Non-Compete Agreements to Protect Their Assets
Why do employers have the right to make an employee sign a non compete agreement in order to get the job? While there has been talk of banning non compete agreements here in Pennsylvania due to their restrictive nature on the workforce, they are currently in line with the law when they are used by an employer to “protect a legitimate business interest.” There are two main objectives that an employer will accomplish with a non compete agreement:
- To retain employees and to protect the time and resources invested in training them; and
- To protect trade secrets.
There are a few other legitimate reasons that an employer would use a non compete agreement to protect legitimate business interests, but these are the two most common reasons. While it is an employer’s right to use a non compete agreement to protect their business interests, it is not their right to inflict undue hardship on their employees with a non compete clause. Some agreements are not enforceable because they are overly restrictive or fail to actually protect a legitimate business interest.
How do Courts Decide if a Non-Compete Agreement is Valid or Not?
While there is no specific Pennsylvania statute that addresses non-compete agreements, a court will determine whether or not an agreement should be upheld based on if it is reasonable. An unreasonable non compete agreement will not be considered valid. However, you never know what a court will decide years down the road. If your non compete agreement looks to be unreasonable now, with a five-year commitment to not work in the same field after you leave your job, it is best to address this clause now, rather than hope that it will be struck down by a court at a later date.
Call the Pennsylvania Employment Attorneys at HKM Today
Non compete agreements are used more and more these days. One-fifth of American workers have signed a non compete agreement, according to The New York Times. Even fast food workers are often required to sign non compete agreements, usually more as a dissuasion to leave the job rather than to protect the employer’s assets. Janitors are even required to sign non compete agreements, according to USA Today, as employers continue to burden their employees with ridiculous contracts in order to intimidate them into staying put. All non compete agreements should be reviewed by an experienced Pennsylvania attorney to ensure that your best interests are represented, not just your employer’s.