Lexology July 11, 2024
Restrictive covenants, i.e.,non-competition and non-disclosure clauses are used by employers to shield protectable business interests.[1] A non-competition covenant precludes the former employee from competing with his prior employer for a specified period and within a precise geographic area. Id. Restrictive covenants are historically not favored, as they are viewed as a restraint on the ability of an employee to work in that geographic area.[2]
Current Pennsylvania law will enforce restrictive covenants only if they are: (1) ancillary to an employment relationship between an employee and an employer; (2) supported by adequate consideration; (3) the restrictions are reasonably limited in duration and geographic extent; and (4) the restrictions are designed to protect the legitimate interests of the employer.[3] However, the applicability...
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