{ "type": "practice-guide", "canonical": "https://openagreements.org/practice-guides/non-compete/us/pennsylvania", "links": [ { "rel": "self", "href": "https://openagreements.org/practice-guides/non-compete/us/pennsylvania.json", "type": "application/json" }, { "rel": "alternate", "href": "https://openagreements.org/practice-guides/non-compete/us/pennsylvania", "type": "text/html" }, { "rel": "alternate", "href": "https://openagreements.org/practice-guides/non-compete/us/pennsylvania/markdown", "type": "text/markdown" }, { "rel": "alternate", "href": "https://openagreements.org/practice-guides/non-compete/us/pennsylvania/json", "type": "application/json" } ], "data": { "topic": "non-compete", "state": "pennsylvania", "frontmatter": { "title": "Non-Competes in Pennsylvania", "description": "Pennsylvania enforces non-competes only when they are ancillary to employment, supported by adequate consideration, and reasonably limited, and a 2024 statute sharply restricts health care non-competes.", "state": "Pennsylvania", "lastReviewed": "2026-06-03", "license": "CC BY 4.0", "authors": [ "steven-obiajulu" ], "summary": { "enforceability": "reasonable", "bottomLine": "Pennsylvania enforces an employee non-compete only if it is ancillary to employment, supported by adequate consideration, reasonably limited in time and territory, and tied to a legitimate business interest, with a 2024 statute sharply restricting health care covenants.", "keyLaw": "Socko v. Mid-Atlantic Systems of CPA, Inc., 126 A.3d 1266 (Pa. 2015)", "exceptions": "Health-care practitioner restrictions (Act 74 of 2024, eff. Jan 1, 2025 — voids covenants over one year and any where employer dismissed practitioner); B2B no-hire clauses unenforceable (Beemac)", "courtNarrowing": "rewrite", "appliesToContractors": "unclear", "extendedForBreach": "Unsettled", "maxLength": "No statutory limit (except Act 74 one-year cap for health care)", "noticeRequirement": "None", "incomeThreshold": "None", "saleOfBusiness": "Assigned asset-sale covenant can be enforced", "customerNonSolicit": "Reasonableness test applies; no-accept clauses scrutinized", "employeeNonSolicit": "B2B no-hire clauses unenforceable (Beemac)" }, "about": [ "Pennsylvania non-compete agreements", "Pennsylvania restrictive covenants", "Socko v. Mid-Atlantic Systems consideration rule", "Pennsylvania non-compete reasonableness test", "Pennsylvania blue pencil reformation", "Fair Contracting for Health Care Practitioners Act", "Pittsburgh Logistics v. Beemac no-hire rule" ], "translations": [ { "language": "中文", "status": "planned" }, { "language": "Español", "status": "planned" }, { "language": "Português", "status": "planned" }, { "language": "Deutsch", "status": "planned" } ], "relatedForm": { "slug": "openagreements-restrictive-covenant-pennsylvania" } }, "questions": [ { "slug": "employee-non-compete-enforceability", "label": "Are employee non-competes enforceable?", "heading": "Are employee non-compete agreements enforceable in Pennsylvania?", "answerText": "Yes, sometimes. Pennsylvania is a reasonableness state, not a general ban state, but its courts are historically hostile to restraints on trade. A non-compete is enforceable only if it is ancillary to an employment relationship, supported by adequate consideration, reasonably limited in time and territory, and designed to protect a legitimate business interest of the employer.", "sources": [ { "id": "socko-four-part-test", "authorityType": "case-law", "tier": "primary-source-backed", "title": "Socko v. Mid-Atlantic Systems of CPA, Inc.", "citation": "Socko v. Mid-Atlantic Systems of CPA, Inc., 126 A.3d 1266 (Pa. 2015).", "url": "https://www.courtlistener.com/opinion/3155889/socko-d-v-mid-atantic-systems-of-cpa-inc-aplt/", "deepLink": "https://www.courtlistener.com/opinion/3155889/socko-d-v-mid-atantic-systems-of-cpa-inc-aplt/#:~:text=Consistent%20with%20this%20legal%20background%2C,legitimate%20interests%20of%20the%20employer.", "proposition": "Socko restates Pennsylvania's four-part rule that a restrictive covenant is enforceable only if it is ancillary to employment, supported by adequate consideration, reasonably limited, and designed to protect the employer's legitimate interests.", "verbatimQuote": "Consistent with this legal background, currently in Pennsylvania, restrictive covenants are enforceable 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.", "date": "2015-11-18", "anchor": "https://openagreements.org/practice-guides/non-compete/us/pennsylvania#src-socko-four-part-test" }, { "id": "morgans-prima-facie", "authorityType": "case-law", "tier": "primary-source-backed", "title": "Morgan's Home Equipment Corp. v. Martucci", "citation": "Morgan's Home Equipment Corp. v. Martucci, 136 A.2d 838 (Pa. 1957).", "url": "https://www.courtlistener.com/opinion/2330966/morgans-home-equipment-corp-v-martucci/", "deepLink": "https://www.courtlistener.com/opinion/2330966/morgans-home-equipment-corp-v-martucci/#:~:text=We%20have%20held%20that%20employment,of%20time%20and%20geographical%20extent.", "proposition": "Morgan's Home Equipment supports that a post-employment covenant is only prima facie enforceable when reasonably limited in duration and geographic extent.", "verbatimQuote": "We have held that employment contracts containing general covenants by an employe not to compete after the termination of his employment are prima facie enforcible if they are reasonably limited as to duration of time and geographical extent.", "date": "1957-11-22", "anchor": "https://openagreements.org/practice-guides/non-compete/us/pennsylvania#src-morgans-prima-facie" } ] }, { "slug": "consideration", "label": "Is continued employment enough consideration?", "heading": "Is continued at-will employment enough consideration for a Pennsylvania non-compete?", "answerText": "No, not by itself, for an existing employee. When a covenant is added after employment has begun, it is enforceable only if the employee receives new and valuable consideration beyond merely keeping the job.", "sources": [ { "id": "socko-mid-employment", "authorityType": "case-law", "tier": "primary-source-backed", "title": "Socko v. Mid-Atlantic Systems of CPA, Inc.", "citation": "Socko v. Mid-Atlantic Systems of CPA, Inc., 126 A.3d 1266 (Pa. 2015).", "url": "https://www.courtlistener.com/opinion/3155889/socko-d-v-mid-atantic-systems-of-cpa-inc-aplt/", "deepLink": "https://www.courtlistener.com/opinion/3155889/socko-d-v-mid-atantic-systems-of-cpa-inc-aplt/#:~:text=In%20the%20context%20of%20requiring,to%20support%20the%20restrictive%20clause.", "proposition": "Socko supports that a covenant required mid-employment is enforceable only with new and valuable consideration beyond mere continued employment.", "verbatimQuote": "In the context of requiring an employee to agree to a restrictive covenant mid-employment, however, such a restraint on trade will be enforceable only if new and valuable consideration, beyond mere continued employment, is provided and is sufficient to support the restrictive clause.", "date": "2015-11-18", "anchor": "https://openagreements.org/practice-guides/non-compete/us/pennsylvania#src-socko-mid-employment" }, { "id": "socko-uwoa", "authorityType": "case-law", "tier": "primary-source-backed", "title": "Socko v. Mid-Atlantic Systems of CPA, Inc.", "citation": "Socko v. Mid-Atlantic Systems of CPA, Inc., 126 A.3d 1266 (Pa. 2015).", "url": "https://www.courtlistener.com/opinion/3155889/socko-d-v-mid-atantic-systems-of-cpa-inc-aplt/", "deepLink": "https://www.courtlistener.com/opinion/3155889/socko-d-v-mid-atantic-systems-of-cpa-inc-aplt/#:~:text=we%20conclude%20that%20a%20construction,of%20employment%20would%20be%20unreasonable.", "proposition": "Socko supports that the Uniform Written Obligations Act's intend-to-be-legally-bound recital does not cure a lack of consideration for a restrictive covenant.", "verbatimQuote": "we conclude that a construction of the UWOA which would vitiate the need for new and valuable consideration when entering into an agreement containing a restrictive covenant after the initiation of employment would be unreasonable.", "date": "2015-11-18", "anchor": "https://openagreements.org/practice-guides/non-compete/us/pennsylvania#src-socko-uwoa" }, { "id": "maintenance-continued-employment", "authorityType": "case-law", "tier": "primary-source-backed", "title": "Maintenance Specialties, Inc. v. Gottus", "citation": "Maintenance Specialties, Inc. v. Gottus, 314 A.2d 279 (Pa. 1974).", "url": "https://www.courtlistener.com/opinion/1925441/maintenance-specialties-inc-v-gottus/", "deepLink": "https://www.courtlistener.com/opinion/1925441/maintenance-specialties-inc-v-gottus/#:~:text=An%20employee's%20continued%20employment%20is,employment%20for%20a%20definite%20term.", "proposition": "Maintenance Specialties supports that continued employment is not sufficient consideration for a covenant signed after employment began.", "verbatimQuote": "An employee's continued employment is not sufficient consideration for a covenant not to compete which the employee signed after the inception of his employment, where the employer makes no promise of continued employment for a definite term.", "date": "1974-01-25", "anchor": "https://openagreements.org/practice-guides/non-compete/us/pennsylvania#src-maintenance-continued-employment" }, { "id": "rullex-essential-provisions", "authorityType": "case-law", "tier": "primary-source-backed", "title": "Rullex Co. v. Tel-Stream, Inc.", "citation": "Rullex Co. v. Tel-Stream, Inc., 232 A.3d 620 (Pa. 2020).", "url": "https://www.courtlistener.com/opinion/4761300/rullex-co-llc-aplt-v-tel-stream-inc/", "deepLink": "https://www.courtlistener.com/opinion/4761300/rullex-co-llc-aplt-v-tel-stream-inc/#:~:text=From%20the%20foregoing%20it%20should,beginning%20of%20the%20employment%20relationship.", "proposition": "Rullex supports that a covenant signed after the first day of work is enforceable without new consideration only if the parties agreed to its essential provisions at the start of employment.", "verbatimQuote": "From the foregoing it should be evident that, for a restrictive covenant executed after the first day of employment to be enforceable absent new consideration, the parties must have agreed to its essential provisions as of the beginning of the employment relationship.", "date": "2020-06-16", "anchor": "https://openagreements.org/practice-guides/non-compete/us/pennsylvania#src-rullex-essential-provisions" }, { "id": "kistler-new-consideration", "authorityType": "case-law", "tier": "primary-source-backed", "title": "George W. Kistler, Inc. v. O'Brien", "citation": "George W. Kistler, Inc. v. O'Brien, 347 A.2d 311 (Pa. 1975).", "url": "https://www.courtlistener.com/opinion/1482686/george-w-kistler-inc-v-obrien/", "deepLink": "https://www.courtlistener.com/opinion/1482686/george-w-kistler-inc-v-obrien/#:~:text=While%20a%20restrictive%20covenant%2C%20in,be%20supported%20by%20new%20consideration.", "proposition": "Kistler supports that a covenant agreed upon after the initial contract must be supported by new consideration.", "verbatimQuote": "While a restrictive covenant, in order to be valid need not appear in the initial contract, if it is agreed upon at some later time it must be supported by new consideration.", "date": "1975-10-30", "anchor": "https://openagreements.org/practice-guides/non-compete/us/pennsylvania#src-kistler-new-consideration" } ] }, { "slug": "protectable-interests", "label": "What interests are protectable?", "heading": "What legitimate business interests can support a Pennsylvania non-compete?", "answerText": "Genuinely specialized training and trade secrets are the clearest examples, alongside confidential information and customer goodwill. A covenant that exists only to suppress ordinary competition is not protecting anything Pennsylvania law recognizes.", "sources": [ { "id": "morgans-specialized-training", "authorityType": "case-law", "tier": "primary-source-backed", "title": "Morgan's Home Equipment Corp. v. Martucci", "citation": "Morgan's Home Equipment Corp. v. Martucci, 136 A.2d 838 (Pa. 1957).", "url": "https://www.courtlistener.com/opinion/2330966/morgans-home-equipment-corp-v-martucci/", "deepLink": "https://www.courtlistener.com/opinion/2330966/morgans-home-equipment-corp-v-martucci/#:~:text=An%20employe%20may%20receive%20specialized,secrets%20of%20a%20particular%20enterprise.", "proposition": "Morgan's Home Equipment supports that specialized training, skills, and guarded methods that are trade secrets are protectable interests.", "verbatimQuote": "An employe may receive specialized training and skills, and learn the carefully guarded methods of doing business which are the trade secrets of a particular enterprise.", "date": "1957-11-22", "anchor": "https://openagreements.org/practice-guides/non-compete/us/pennsylvania#src-morgans-specialized-training" }, { "id": "q3-morgans-reasonably-necessary", "authorityType": "case-law", "tier": "primary-source-backed", "title": "Morgan's Home Equipment Corp. v. Martucci", "citation": "Morgan's Home Equipment Corp. v. Martucci, 136 A.2d 838 (Pa. 1957).", "url": "https://www.courtlistener.com/opinion/2330966/morgans-home-equipment-corp-v-martucci/", "deepLink": "https://www.courtlistener.com/opinion/2330966/morgans-home-equipment-corp-v-martucci/#:~:text=They%20are%20enforced%20by%20the,the%20protection%20of%20the%20employer.", "proposition": "Morgan's Home Equipment supports that covenants protecting these interests are enforced only as reasonably necessary for the employer's protection.", "verbatimQuote": "They are enforced by the courts as reasonably necessary for the protection of the employer.", "date": "1957-11-22", "anchor": "https://openagreements.org/practice-guides/non-compete/us/pennsylvania#src-q3-morgans-reasonably-necessary" } ] }, { "slug": "duration-limits", "label": "How much time and territory are reasonable?", "heading": "What duration and geographic scope are reasonable for a Pennsylvania non-compete?", "answerText": "Outside Act 74's health care rules, there is no statutory cap. Pennsylvania courts permit enforcement only where the covenant is incident to employment, reasonably necessary to protect the employer, and reasonably limited in both duration and geographic extent.", "sources": [ { "id": "sidco-general-rule", "authorityType": "case-law", "tier": "primary-source-backed", "title": "Sidco Paper Co. v. Aaron", "citation": "Sidco Paper Co. v. Aaron, 351 A.2d 250 (Pa. 1976).", "url": "https://www.courtlistener.com/opinion/1437137/sidco-paper-company-v-aaron/", "deepLink": "https://www.courtlistener.com/opinion/1437137/sidco-paper-company-v-aaron/#:~:text=Our%20courts%20will%20permit%20the,in%20duration%20and%20geographic%20extent.", "proposition": "Sidco supports that post-employment restraints are enforced only where incident to employment, reasonably necessary to protect the employer, and reasonably limited in duration and geographic extent.", "verbatimQuote": "Our courts will permit the equitable enforcement of post-employment restraints only where they are incident to an employment relation between the parties to the covenant, the restrictions are reasonably necessary for the protection of the employer, and the restrictions are reasonably limited in duration and geographic extent.", "date": "1976-01-29", "anchor": "https://openagreements.org/practice-guides/non-compete/us/pennsylvania#src-sidco-general-rule" }, { "id": "beemac-geo-duration", "authorityType": "case-law", "tier": "primary-source-backed", "title": "Pittsburgh Logistics Systems, Inc. v. Beemac Trucking, LLC", "citation": "Pittsburgh Logistics Systems, Inc. v. Beemac Trucking, LLC, 249 A.3d 918 (Pa. 2021).", "url": "https://www.courtlistener.com/opinion/4878381/pgh-logistics-aplt-v-beemac-trucking/", "deepLink": "https://www.courtlistener.com/opinion/4878381/pgh-logistics-aplt-v-beemac-trucking/#:~:text=As%20part%20of%20this%20balancing,as%20its%20duration%20of%20time.", "proposition": "Beemac supports that courts consider the reasonableness of a restraint's geographic scope together with its duration.", "verbatimQuote": "As part of this balancing test, courts also consider the reasonableness of the restraint’s geographical scope as well as its duration of time.", "date": "2021-04-29", "anchor": "https://openagreements.org/practice-guides/non-compete/us/pennsylvania#src-beemac-geo-duration" } ] }, { "slug": "court-narrowing", "label": "Will Pennsylvania courts narrow overbroad covenants?", "heading": "Will a Pennsylvania court blue-pencil or reform an overbroad non-compete?", "answerText": "Sometimes, but do not count on it. A Pennsylvania court of equity may enforce only the reasonable portions of an overbroad covenant, yet it will scrutinize the restraint closely and may decline to rewrite a covenant drafted far broader than necessary.", "sources": [ { "id": "sidco-partial-enforcement", "authorityType": "case-law", "tier": "primary-source-backed", "title": "Sidco Paper Co. v. Aaron", "citation": "Sidco Paper Co. v. Aaron, 351 A.2d 250 (Pa. 1976).", "url": "https://www.courtlistener.com/opinion/1437137/sidco-paper-company-v-aaron/", "deepLink": "https://www.courtlistener.com/opinion/1437137/sidco-paper-company-v-aaron/#:~:text=However%2C%20where%20the%20covenant%20imposes,the%20protection%20of%20the%20employer.", "proposition": "Sidco supports that a court of equity may grant enforcement limited to the portions of an overbroad covenant that are reasonably necessary to protect the employer.", "verbatimQuote": "However, where the covenant imposes restrictions broader than necessary to protect the employer, we have repeatedly held that a court of equity may grant enforcement limited to those portions of the restrictions which are reasonably necessary for the protection of the employer.", "date": "1976-01-29", "anchor": "https://openagreements.org/practice-guides/non-compete/us/pennsylvania#src-sidco-partial-enforcement" }, { "id": "reading-aviation-overreach", "authorityType": "case-law", "tier": "primary-source-backed", "title": "Reading Aviation Service, Inc. v. Bertolet", "citation": "Reading Aviation Service, Inc. v. Bertolet, 311 A.2d 628 (Pa. 1973).", "url": "https://www.courtlistener.com/opinion/6390927/reading-aviation-service-inc-v-bertolet/", "deepLink": "https://www.courtlistener.com/opinion/6390927/reading-aviation-service-inc-v-bertolet/#:~:text=The%20objection%20to%20such%20a,part%2C%20if%20not%20in%20full.", "proposition": "Reading Aviation supports that courts are wary of rewriting overbroad covenants because doing so encourages employers to insist on excessive restrictions.", "verbatimQuote": "The objection to such a practice is that it tends to encourage employers and purchasers possessing superior bargaining power over that of their employees and vendors to insist upon unreasonable and excessive restrictions, secure in the knowledge that the promise may be upheld in part, if not in full.", "date": "1973-11-26", "anchor": "https://openagreements.org/practice-guides/non-compete/us/pennsylvania#src-reading-aviation-overreach" }, { "id": "reading-aviation-close-scrutiny", "authorityType": "case-law", "tier": "primary-source-backed", "title": "Reading Aviation Service, Inc. v. Bertolet", "citation": "Reading Aviation Service, Inc. v. Bertolet, 311 A.2d 628 (Pa. 1973).", "url": "https://www.courtlistener.com/opinion/6390927/reading-aviation-service-inc-v-bertolet/", "deepLink": "https://www.courtlistener.com/opinion/6390927/reading-aviation-service-inc-v-bertolet/#:~:text=Because%20of%20the%20inherently%20unequal,their%20employers%20to%20close%20scrutiny.", "proposition": "Reading Aviation supports that Pennsylvania courts subject employee non-competition covenants to close scrutiny because of unequal bargaining positions.", "verbatimQuote": "Because of the inherently unequal bargaining positions of the parties, we have consistently subjected covenants of non-competition between employees and their employers to close scrutiny.", "date": "1973-11-26", "anchor": "https://openagreements.org/practice-guides/non-compete/us/pennsylvania#src-reading-aviation-close-scrutiny" } ] }, { "slug": "termination-effect", "label": "Does it matter who ended the employment?", "heading": "Does it matter whether the employer or the employee ended the employment?", "answerText": "Yes. How the employment ended is an important factor. A Pennsylvania court is markedly less willing to enforce a covenant against an employee the employer fired for failing to do the job than against one who voluntarily left.", "sources": [ { "id": "brobston-distinction", "authorityType": "case-law", "tier": "primary-source-backed", "title": "Insulation Corp. of America v. Brobston", "citation": "Insulation Corp. of America v. Brobston, 667 A.2d 729 (Pa. Super. 1995).", "url": "https://www.courtlistener.com/opinion/2383660/insulation-corp-of-america-v-brobston/", "deepLink": "https://www.courtlistener.com/opinion/2383660/insulation-corp-of-america-v-brobston/#:~:text=It%20bears%20noting%20that%20there,failing%20to%20do%20his%20job.", "proposition": "Brobston supports that there is a significant distinction between enforcing a covenant against an employee who voluntarily leaves and one terminated for failing to do the job.", "verbatimQuote": "It bears noting that there is a significant factual distinction between the hardship imposed by the enforcement of a restrictive covenant on an employee who voluntarily leaves his employer and that imposed upon an employee who is terminated for failing to do his job.", "date": "1995-11-03", "anchor": "https://openagreements.org/practice-guides/non-compete/us/pennsylvania#src-brobston-distinction" }, { "id": "brobston-fired", "authorityType": "case-law", "tier": "primary-source-backed", "title": "Insulation Corp. of America v. Brobston", "citation": "Insulation Corp. of America v. Brobston, 667 A.2d 729 (Pa. Super. 1995).", "url": "https://www.courtlistener.com/opinion/2383660/insulation-corp-of-america-v-brobston/", "deepLink": "https://www.courtlistener.com/opinion/2383660/insulation-corp-of-america-v-brobston/#:~:text=Where%20an%20employee%20is%20terminated,the%20employee%20in%20its%20service.", "proposition": "Brobston supports that an employer who fires an employee for failing to promote its business interests has implicitly decided those interests are best served without the employee.", "verbatimQuote": "Where an employee is terminated by his employer on the grounds that he has failed to promote the employer's legitimate business interests, it clearly suggests an implicit decision on the part of the employer that its business interests are best promoted without the employee in its service.", "date": "1995-11-03", "anchor": "https://openagreements.org/practice-guides/non-compete/us/pennsylvania#src-brobston-fired" } ] }, { "slug": "customer-nonsolicit", "label": "How are customer non-solicitation clauses treated?", "heading": "How does Pennsylvania treat customer non-solicitation and no-accept clauses?", "answerText": "Sometimes. Narrow customer non-solicitation clauses can be enforceable, but a recent non-precedential Superior Court decision read solicit to require an affirmative act and treated a clause as overbroad where it lacked a geographic limit and barred an employee from merely accepting business.", "sources": [ { "id": "english-affirmative-act", "authorityType": "case-law", "tier": "primary-source-backed", "title": "First National Trust Co. v. English", "citation": "First National Trust Co. v. English, No. 1109 WDA 2025 (Pa. Super. Feb. 18, 2026) (non-precedential).", "url": "https://www.pacourts.us/assets/opinions/Superior/out/J-A02018-26m%20-%20106684106347494370.pdf", "proposition": "English supports that the terms solicit, divert, and entice each require an affirmative act, so passively accepting business is not solicitation.", "verbatimQuote": "Significantly, the terms “solicit”, “divert,” and “entice” are verbs, with each requiring an affirmative act.", "date": "2026-02-18", "anchor": "https://openagreements.org/practice-guides/non-compete/us/pennsylvania#src-english-affirmative-act" }, { "id": "english-no-geo", "authorityType": "case-law", "tier": "primary-source-backed", "title": "First National Trust Co. v. English", "citation": "First National Trust Co. v. English, No. 1109 WDA 2025 (Pa. Super. Feb. 18, 2026) (non-precedential).", "url": "https://www.pacourts.us/assets/opinions/Superior/out/J-A02018-26m%20-%20106684106347494370.pdf", "proposition": "English supports that a non-solicitation clause lacking any geographic scope is unenforceable as written.", "verbatimQuote": "Thus, the non-solicitation clause is unenforceable as written.", "date": "2026-02-18", "anchor": "https://openagreements.org/practice-guides/non-compete/us/pennsylvania#src-english-no-geo" }, { "id": "english-predated-customers", "authorityType": "case-law", "tier": "primary-source-backed", "title": "First National Trust Co. v. English", "citation": "First National Trust Co. v. English, No. 1109 WDA 2025 (Pa. Super. Feb. 18, 2026) (non-precedential).", "url": "https://www.pacourts.us/assets/opinions/Superior/out/J-A02018-26m%20-%20106684106347494370.pdf", "proposition": "English supports that it is unreasonable to extend a restrictive covenant to customers whose relationships predated the employee's employment.", "verbatimQuote": "Keeping in mind that Pennsylvania law disfavors restrictive covenants, see Socko, we conclude that it would be unreasonable to include the customers of Advisors, whose relationships predated each advisor’s employment with Appellant.", "date": "2026-02-18", "anchor": "https://openagreements.org/practice-guides/non-compete/us/pennsylvania#src-english-predated-customers" } ] }, { "slug": "extended-for-breach", "label": "Does Pennsylvania toll a non-compete?", "heading": "Does a Pennsylvania non-compete toll or extend during breach or litigation?", "answerText": "This is an unsettled Pennsylvania question. No Pennsylvania statute or appellate decision discussed in this note squarely endorses automatically tolling or extending the restricted period while the former employee is in breach or while litigation is pending.", "sources": [ { "id": "q8-sidco-reasonably-necessary", "authorityType": "case-law", "tier": "primary-source-backed", "title": "Sidco Paper Co. v. Aaron", "citation": "Sidco Paper Co. v. Aaron, 351 A.2d 250 (Pa. 1976).", "url": "https://www.courtlistener.com/opinion/1437137/sidco-paper-company-v-aaron/", "deepLink": "https://www.courtlistener.com/opinion/1437137/sidco-paper-company-v-aaron/#:~:text=Our%20courts%20will%20permit%20the,in%20duration%20and%20geographic%20extent.", "proposition": "Sidco supports that any restraint, including an extension of the restricted period, must be reasonably necessary to protect the employer and reasonably limited in duration.", "verbatimQuote": "Our courts will permit the equitable enforcement of post-employment restraints only where they are incident to an employment relation between the parties to the covenant, the restrictions are reasonably necessary for the protection of the employer, and the restrictions are reasonably limited in duration and geographic extent.", "date": "1976-01-29", "anchor": "https://openagreements.org/practice-guides/non-compete/us/pennsylvania#src-q8-sidco-reasonably-necessary" }, { "id": "q8-morgans-prima-facie", "authorityType": "case-law", "tier": "primary-source-backed", "title": "Morgan's Home Equipment Corp. v. Martucci", "citation": "Morgan's Home Equipment Corp. v. Martucci, 136 A.2d 838 (Pa. 1957).", "url": "https://www.courtlistener.com/opinion/2330966/morgans-home-equipment-corp-v-martucci/", "deepLink": "https://www.courtlistener.com/opinion/2330966/morgans-home-equipment-corp-v-martucci/#:~:text=We%20have%20held%20that%20employment,of%20time%20and%20geographical%20extent.", "proposition": "Morgan's Home Equipment supports that a covenant is only prima facie enforceable when reasonably limited as to duration, which cuts against an open-ended extension.", "verbatimQuote": "We have held that employment contracts containing general covenants by an employe not to compete after the termination of his employment are prima facie enforcible if they are reasonably limited as to duration of time and geographical extent.", "date": "1957-11-22", "anchor": "https://openagreements.org/practice-guides/non-compete/us/pennsylvania#src-q8-morgans-prima-facie" } ] }, { "slug": "healthcare-act74", "label": "Are health care non-competes restricted?", "heading": "Are non-competes for health care practitioners restricted in Pennsylvania?", "answerText": "Yes. The Fair Contracting for Health Care Practitioners Act (Act 74 of 2024), effective January 1, 2025, voids non-compete covenants longer than one year for covered practitioners and voids a covenant of any length when the employer dismisses the practitioner.", "sources": [ { "id": "act74-applicability", "authorityType": "primary-law", "tier": "primary-source-backed", "title": "Fair Contracting for Health Care Practitioners Act § 4(a)", "citation": "Fair Contracting for Health Care Practitioners Act, Act of July 17, 2024, P.L. 846, No. 74, § 4(a) (Pa.).", "url": "https://www.legis.state.pa.us/WU01/LI/LI/US/HTM/2024/0/0074..HTM", "proposition": "Act 74 makes a noncompete covenant entered into after its effective date contrary to public policy and void and unenforceable by an employer, except as provided in the exception.", "verbatimQuote": "(a) Applicability.--Except as provided under subsection (b), a noncompete covenant entered into after the effective date of this subsection is deemed contrary to the public policy and is void and unenforceable by an employer.", "anchor": "https://openagreements.org/practice-guides/non-compete/us/pennsylvania#src-act74-applicability" }, { "id": "act74-exception", "authorityType": "primary-law", "tier": "primary-source-backed", "title": "Fair Contracting for Health Care Practitioners Act § 4(b)", "citation": "Fair Contracting for Health Care Practitioners Act, Act of July 17, 2024, P.L. 846, No. 74, § 4(b) (Pa.).", "url": "https://www.legis.state.pa.us/WU01/LI/LI/US/HTM/2024/0/0074..HTM", "proposition": "Act 74 permits enforcement only if the covenant is no more than one year and the practitioner was not dismissed by the employer.", "verbatimQuote": "(b) Exception.--An employer may enforce a noncompete covenant if the length of the noncompete covenant is no more than one year, provided that the health care practitioner was not dismissed by the employer.", "anchor": "https://openagreements.org/practice-guides/non-compete/us/pennsylvania#src-act74-exception" }, { "id": "act74-practitioner", "authorityType": "primary-law", "tier": "primary-source-backed", "title": "Fair Contracting for Health Care Practitioners Act § 3", "citation": "Fair Contracting for Health Care Practitioners Act, Act of July 17, 2024, P.L. 846, No. 74, § 3 (Pa.).", "url": "https://www.legis.state.pa.us/WU01/LI/LI/US/HTM/2024/0/0074..HTM", "proposition": "Act 74 defines the covered health care practitioners as medical doctors, doctors of osteopathy, certified registered nurse anesthetists, certified registered nurse practitioners, and physician assistants.", "verbatimQuote": "\"Health care practitioner.\" The following: (1) A medical doctor as defined in section 2 of the act of December 20, 1985 (P.L.457, No.112), known as the Medical Practice Act of 1985. (2) A doctor of osteopathy under the act of October 5, 1978 (P.L.1109, No.261), known as the Osteopathic Medical Practice Act. (3) A certified registered nurse anesthetist as defined in section 2(16) of the act of May 22, 1951 (P.L.317, No.69), known as The Professional Nursing Law. (4) A certified registered nurse practitioner as defined in section 2(12) of The Professional Nursing Law. (5) A physician assistant as defined in section 2 of the Osteopathic Medical Practice Act or section 2 of the Medical Practice Act of 1985.", "anchor": "https://openagreements.org/practice-guides/non-compete/us/pennsylvania#src-act74-practitioner" }, { "id": "act74-notice", "authorityType": "primary-law", "tier": "primary-source-backed", "title": "Fair Contracting for Health Care Practitioners Act § 5(b)", "citation": "Fair Contracting for Health Care Practitioners Act, Act of July 17, 2024, P.L. 846, No. 74, § 5(b) (Pa.).", "url": "https://www.legis.state.pa.us/WU01/LI/LI/US/HTM/2024/0/0074..HTM", "proposition": "Act 74 requires an employer to notify a departing practitioner's recent patients within 90 days of the departure.", "verbatimQuote": "(b) Time period.--The employer shall provide the notice within 90 days of the health care practitioner's departure.", "anchor": "https://openagreements.org/practice-guides/non-compete/us/pennsylvania#src-act74-notice" } ] }, { "slug": "b2b-no-hire", "label": "Are business-to-business no-hire clauses enforceable?", "heading": "Are business-to-business no-hire clauses enforceable in Pennsylvania?", "answerText": "Generally no. In Pittsburgh Logistics Systems, Inc. v. Beemac Trucking, LLC, the Pennsylvania Supreme Court held that a no-hire clause between two businesses was unreasonably in restraint of trade and unenforceable.", "sources": [ { "id": "beemac-unenforceable", "authorityType": "case-law", "tier": "primary-source-backed", "title": "Pittsburgh Logistics Systems, Inc. v. Beemac Trucking, LLC", "citation": "Pittsburgh Logistics Systems, Inc. v. Beemac Trucking, LLC, 249 A.3d 918 (Pa. 2021).", "url": "https://www.courtlistener.com/opinion/4878381/pgh-logistics-aplt-v-beemac-trucking/", "deepLink": "https://www.courtlistener.com/opinion/4878381/pgh-logistics-aplt-v-beemac-trucking/#:~:text=Balancing%20PLS%E2%80%99s%20interest%20against%20the,of%20trade%20and%20therefore%20unenforceable.", "proposition": "Beemac supports that a business-to-business no-hire provision is unreasonably in restraint of trade and therefore unenforceable.", "verbatimQuote": "Balancing PLS’s interest against the overbreadth of the no-hire provision and the likelihood of harm to the public, we conclude that the no-hire provision is unreasonably in restraint of trade and therefore unenforceable.", "date": "2021-04-29", "anchor": "https://openagreements.org/practice-guides/non-compete/us/pennsylvania#src-beemac-unenforceable" }, { "id": "beemac-overbroad", "authorityType": "case-law", "tier": "primary-source-backed", "title": "Pittsburgh Logistics Systems, Inc. v. Beemac Trucking, LLC", "citation": "Pittsburgh Logistics Systems, Inc. v. Beemac Trucking, LLC, 249 A.3d 918 (Pa. 2021).", "url": "https://www.courtlistener.com/opinion/4878381/pgh-logistics-aplt-v-beemac-trucking/", "deepLink": "https://www.courtlistener.com/opinion/4878381/pgh-logistics-aplt-v-beemac-trucking/#:~:text=However%2C%20the%20no%2Dhire%20provision%20is,of%20harm%20to%20the%20public.", "proposition": "Beemac supports that the no-hire provision was greater than needed to protect the company's interest and created a probability of harm to the public.", "verbatimQuote": "However, the no-hire provision is both greater than needed to protect PLS’s interest and creates a probability of harm to the public.", "date": "2021-04-29", "anchor": "https://openagreements.org/practice-guides/non-compete/us/pennsylvania#src-beemac-overbroad" } ] }, { "slug": "assignment", "label": "Can a buyer enforce an assigned non-compete?", "heading": "Can a buyer enforce a non-compete assigned in an asset sale?", "answerText": "Not automatically. A Pennsylvania restrictive covenant is personal to the original employer and is not assignable to a buyer in an asset sale unless the employment agreement contains a specific assignability provision.", "sources": [ { "id": "hess-not-assignable", "authorityType": "case-law", "tier": "primary-source-backed", "title": "Hess v. Gebhard & Co.", "citation": "Hess v. Gebhard & Co. Inc., 808 A.2d 912 (Pa. 2002).", "url": "https://www.courtlistener.com/opinion/1931597/hess-v-gebhard-co-inc/", "deepLink": "https://www.courtlistener.com/opinion/1931597/hess-v-gebhard-co-inc/#:~:text=Therefore%2C%20we%20hold%20that%20a,in%20a%20sale%20of%20assets.", "proposition": "Hess supports that a restrictive covenant in an employment agreement is not assignable to a purchasing entity in a sale of assets absent a specific assignability provision.", "verbatimQuote": "Therefore, we hold that a restrictive covenant not to compete, contained in an employment agreement, is not assignable to the purchasing business entity, in the absence of a specific assignability provision, where the covenant is included in a sale of assets.", "date": "2002-10-16", "anchor": "https://openagreements.org/practice-guides/non-compete/us/pennsylvania#src-hess-not-assignable" }, { "id": "hess-personal", "authorityType": "case-law", "tier": "primary-source-backed", "title": "Hess v. Gebhard & Co.", "citation": "Hess v. Gebhard & Co. Inc., 808 A.2d 912 (Pa. 2002).", "url": "https://www.courtlistener.com/opinion/1931597/hess-v-gebhard-co-inc/", "deepLink": "https://www.courtlistener.com/opinion/1931597/hess-v-gebhard-co-inc/#:~:text=Like%20the%20contract%20for%20hire%2C,absent%20specific%20provisions%20for%20assignability.", "proposition": "Hess supports that an employee's restrictive covenant is confined to the employer with whom the agreement was made, absent specific provisions for assignability.", "verbatimQuote": "Like the contract for hire, upon which the covenant was given, the employee’s restrictive covenant is confined to the employer with whom the agreement was made, absent specific provisions for assignability.", "date": "2002-10-16", "anchor": "https://openagreements.org/practice-guides/non-compete/us/pennsylvania#src-hess-personal" } ] }, { "slug": "pending-reform", "label": "What reform efforts should employers watch?", "heading": "What Pennsylvania non-compete reform efforts should employers watch?", "answerText": "No general statewide ban is law in Pennsylvania. The only enacted statutory restriction is Act 74's health care carve-out; broader change exists only as pending bills that have not become law.", "sources": [ { "id": "q12-act74-applicability", "authorityType": "primary-law", "tier": "primary-source-backed", "title": "Fair Contracting for Health Care Practitioners Act § 4(a)", "citation": "Fair Contracting for Health Care Practitioners Act, Act of July 17, 2024, P.L. 846, No. 74, § 4(a) (Pa.).", "url": "https://www.legis.state.pa.us/WU01/LI/LI/US/HTM/2024/0/0074..HTM", "proposition": "Act 74 is the enacted Pennsylvania statute restricting non-competes, voiding covered health care covenants entered after its effective date except as provided.", "verbatimQuote": "(a) Applicability.--Except as provided under subsection (b), a noncompete covenant entered into after the effective date of this subsection is deemed contrary to the public policy and is void and unenforceable by an employer.", "anchor": "https://openagreements.org/practice-guides/non-compete/us/pennsylvania#src-q12-act74-applicability" } ] } ] } }