Non-compete agreements cause a great deal of uncertainty in the business world today. Employers need to ensure the agreements they have in place with their employees will hold up in a court of law. Employees need to examine the enforceability of the agreement they signed before they take that new job. Both of these situations lend themselves to seeking appropriate legal counsel. Here, at the Cozza Law Group, we can draft non-compete agreement and other restrictive covenants, review current documents in place or analyze the likelihood of enforceability. Further, we also advice employees of the risks in signing a non-compete agreement prior to engaging in new employment. All of these service are done on a flat fee basis so there are no surprises.
So what is a non-compete agreement?
A non-compete agreement is either an agreement itself, or a provision in another type of contract, in which an employer requires an applicant or employee to sign to prevent them from working for a competitor and not to form a competing business during the term of employment and for a period of time afterwards. Companies may ask an independent contractor to sign a non-compete as well.
How does that differ from a non-solicitation agreement?
A non-solicitation agreement does not necessarily prevent an employee or party from working for a competitor or starting a competing business, it merely provides that an individual may not solicit the employer’s customers or employees if the individual starts a competing business or works for another employer.
Are these types of agreements enforceable?
The enforceability of non-compete or non solicitation agreements (“restrictive covenants”) largely depend upon state law and the reasonableness of the terms of the non-compete and non-solicitation agreements. Whether a non-compete or non-solicitation agreement is reasonable depends upon the facts of the case, including the geographic area involved, the duration of the agreement and the scope of the work involved. In Pennsylvania case law, employers are required to ensure employees receive something in return for agreeing not to compete, whether it is employment itself when hired or something additional, after the employee’s service has already begun.
These agreements are very important and we have extensive experience in reviewing, drafting and analyzing all types of restrictive covenants. It is important, whether you are a business or an employee, to understand these agreements, what they prevent, what they don’t prevent and the consequences of signing one.
