COVENANTS NOT TO COMPETE

Posted on June 9, 2016 · Posted in Business & Corporate Law

A covenant not to compete is a provision contained within a contract that precludes an individual, generally an individual providing a professional service, from competing with a previous employer for a set number of years and a set geographical distance.  These types of clauses are disfavored by Courts in Pennsylvania, but are enforceable if supported by adequate consideration.  Generally these clauses are required as a condition to accepting employment.  There has been a recent case where an employer requested an employee to enter into a covenant not to compete after that employee had already been hired.  This convenant  would not be enforceable unless additional consideration is present.  Additional consideration could take the form of increased pay or increased benefits.  If the employee simply signs a covenant not to compete subsequent to being hired without any additional consideration, then that employee could have the covenant declared to be unenforceable once the employment is terminated.  Our lawyers at Stover McGlaughlin are familiar with these clauses and stand ready to assist in the preparation or review of contracts containing  a covenant not to compete.

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