How non-compete agreements can be challenged

On Behalf of | Jun 9, 2021 | Employment Litigation |

There are many different companies in Pennsylvania performing various services and producing various products. The companies employ many people and rely on these people to run their business and ensure that the company is profitable. These companies have competitors that perform similar services and produce similar products though. It is important for the various companies to be able to differentiate themselves from their competitors.

There are few differences between the companies and those differences can give a company the edge over its competitors. It is important that these differences are not disclosed to their competitors in order to keep that edge. To help keep them secret, they may want to prevent their employees from working for the competitors and potentially helping them take customers or clients from them. One common way that companies do this is by having employees sign non-compete agreements as a condition of employment.

It is also important that people be able to work where they want, though. While non-compete agreements can be valid despite the interest in allowing people to work where they want to, they must meet certain requirements to withstand challenges.

Common ways to defeat a non-compete

There are various ways that former employees may challenge non-compete agreements if they are hindering their ability to work where they want.

  • Lack of consideration – In order to be valid, the employer must provide compensation of some form in exchange for signing the non-compete agreement. This challenge will typically arise when non-compete agreements are signed after employment commences instead of beforehand.
  • Not protecting a legitimate business interest – The non-compete agreement must actually protect a distinct competitive advantage the employer has over another company.
  • Duration and scope – Non-compete agreements cannot last too long or involve too broad of a number of other companies. If the length is not reasonable or it prevents the employee from working from too many other companies, employees may be able to challenge the validity of the non-compete.

Employers in Pennsylvania have legitimate reasons to have their employees sign non-compete agreements. Therefore, it is important that the non-compete agreements are drafted properly in order to withstand the various challenges that former employees will attempt to use to avoid the restrictions. Experienced attorneys understand the elements needed for a valid non-compete agreement and may be able to guide companies through the process.