Is a non compete agreement enforceable in Pennsylvania?
I signed a non compete in April 2012. My organization was acquired in November 2012. They had us re-sign employment agreements but no mention of a non compete. They terminated several of our hubs and our entire salesforce two days ago. In our severance packages, they are asking for non competes. If I don't sign this, since the new employment agreement did not have the non compete, am I still bound? Or are non competes unenforceable in Pennsylvania anyways?
Answered Before I respond to your inquiry, I must state that we have not spoken, I have not reviewed the relevant documents and facts, and I do not represent you. Therefore, my discussion below is not a legal opinion, but is informational only. Finally, my discussion applies only to issues to which Pennsylvania, New Jersey or Federal law apply, unless otherwise specified.
That being said, yes, noncompete agreements are enforceable in PA. It is a myth that they are not enforceable. However, if you don't sign the new agreement, it is likely that you are not bound by the agreement from the prior employer. I cannot tell you for sure, however, without reviewing the documents.
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Answered Each situation is different. Your re-signed employment agreement may have a clause that makes your original non compete agreement binding. Also, your original non compete may have a clause that binds you if a successor purchases the company. In other words, you need to have an attorney look at all your agreements. I agree with fellow counsel that under PA law, a non compete is enforceable. You need to hire an attorney to review the documents.
Answered As the previous two attorneys have mentioned, yes, non-competes are enforceable in Pennsylvania, but only to the extent that they are reasonable in both geographical scope and time limitation.
What is unclear from your posting is that when you signed the first non-compete in April, 2012, was that in connection with the very beginning of your employment with your current company, or were you already an active employee when the company asked you to sign the non-compete? If you were already an active employee and the company did not give you anything of value in exchange for requesting that you sign the non-compete, then the April 2012 agreement may be invalid for lack of consideration (i.e., under PA law, if you are already an employee, the employer has to give you something extra in order to get something more from you).
In November, 2012, if the company did not offer you any additional valuable consideration, as it appears you clearly were an active employee at the time, then I would argue that the November agreement was invalid on the same grounds.
However, if your severance agreement contains a new non-compete and you execute the severance agreement, then the validity of the two previous agreements will be irrelevant, because you will then be bound by the terms of the non-compete contained within your severance agreement, to the extent that those terms are geographically and temporally reasonable.