If you're an employer in Pennsylvania, regardless of your industry, you may strive to protect your business interests by requiring certain employees to sign restrictive covenants. These employment restrictions include non-competition, non-solicitation, non-disclosure,and confidentiality. This type of information includes information that is unique to the business, not generally available to the public, and would give a competitor an unfair advantage if revealed.
Employers should consider whether employees have access to information that should be protected from disclosure and implement the appropriate restrictions. However, restrictive covenants are not boilerplate. These clauses have both common law, and in some states statutory requirements that must be adhered to if the restrictions are to be enforceable. Generally, courts disfavor future restrictions on employment.
At N. Stotler Law, we offer advice on the who, what and when of restrictive covenants. Enlist our help if you wish to draft enforceable restrictions that protect your business information.
There are several potentially valid reasons you might ask employees to sign restrictive covenants They include the following:
A non-competition restriction will be highly scrutinized by the courts in almost every state. The Pennsylvania Supreme Court decisions indicate non-compete agreements may be deemed unenforceable if they fail to serve legitimate purposes while unreasonably limiting the worker’s opportunities to earn a living.
Various details and nuances must be accounted for to determine whether a particular non-compete agreement is enforceable. Generally, though, an agreement may be regarded as enforceable in Pennsylvania if:
Given Court’s general disfavor of future employment restrictions, employers are wise to think critically through the following questions:
Restrictions on sharing information or soliciting customers and employees are far more palatable than restrictions on future employment. Yet, careful drafting is warranted. Your language should be specific to your business and clear to the typical reader (tone down the legal speak). These clauses, while acceptable and enforceable, will be enforced against the drafter if they are unclear
Industries where employee access to trade secrets and inventions, and other confidential information should be sure to include specific language on trade secrets and works for hire. Do not presume these technical issues are addressed by general language on confidentiality.
None of this is meant to discourage you from requesting that your employees abide by the terms of restrictive covenant agreements. Remember, a sound agreement can protect your company in the long run.You simply need to be thoughtful in your drafting
At N. Stotler Law, we offer Pittsburgh advice on the use of restrictive covenants to protect your business interests. We’ll discuss your goals and assist you in developing a agreements that allow you to legally achieve these goals. For more information about what we can do for you, contact us online or call us at 724-841-5565.