Many times, employers will want to protect themselves from unfair competition when they bring on a new employee, train them, introduce them to clients and customers, impart financial data and more – and then the person leaves. In an effort to protect itself, an employer will ask the employee to sign an agreement which seeks to limit where the departing employee can work. These provisions are often referred to, in Pennsylvania, as restrictive covenants.
The most common restrictive covenant seeks to prohibit the departing employer from…
…working with a competitor. This is often called a “non-competition” restrictive covenant. Generally, a non-competition agreement provision will specify that the departing employer cannot work, either as part of self employment or with another employer, in any way that competes in the same type of business as the one they are departing. It will restrict the employee from soliciting business of the same type as well.
Also a the non-competition restriction will typically include a statement as to how long it lasts (i.e., 6 months, 1 year, 5 years, etc.). Similarly, there will be a statement as to the geographic scope of the restriction as well. This is often stated in miles (i.e., within 10 miles, within 50 miles) from where the main employer performs work.
In a subsequent blog I will discuss the legality of such restrictions and what the courts have said about them. In the mean time, if you are asked to sign such a restrictive covenant as part or your employment in Pennsylvania, or if you want to draft such an agreement for your employee(s), contact the Pennsylvania employment attorneys at Menges & McLaughlin for help at www.yourlawfirmforlife.com.