Legal Question in Employment Law in Pennsylvania

A restrictive covenant that tries to limit where you can work after leaving employment is not favored by the law and will be closely reviewed with regard to both time and distance of the restriction. The time and distance restrictions must be deemed reasonable to protect the employer's interests and must not unduly impose on the public interest in free trade. Depending on the jurisdiction, a court may have the power to adjust the restriciton or may only have the power to enforce/reject.

The covenant must be supported by what the law calls "adequate consideration." Consideration is something of value that is exchanged. Ordinarily, the exchange is created by the employee giving up the right to freely compete after termination in exchange for the job offer. When a restrictive covenant is presented after the date of hire, this exchange no longer applies.

Ordinarily, continuation of employment is not considered an adequate exchange for the loss of the employee's rights. It is usually very difficult for the employer to establish that the employee received some benefit, in exchange, that would be considered "adequate consideration." Thus, it may be very difficult for your employer to prove that the covenant is enforceable.

As a practical matter, the litigation of thes types of cases, if the employer chooses enforcement, involves significant legal fees that are incurred very, very quickly. These cases usualy involve requests for temporary restraining orders and injuctions. They require the lawyers to devote a lot of time and resources in a very short period of time, and to push other work aside to get that case done. In other words, these cases are very expensive.

Usually, the company that employs you is in a much better position to bear that expense. So, even though the ultimate enforceablility of such a provision is doubtful, employees are often unable to finance the litigation to the point of getting to that result. These cases are best resolved through settlement before both parties spend huge amounts in fees.

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