Pennsylvania law makes it easy to enforce noncompete contracts. But trying to make a business-interference claim against an ex-employee is almost a lost cause.
For that reason, it's doubly important to establish bulletproof noncompete agreements for all employees who carry the potential to pull businesses away from you when they depart.
Case in point: John Newman, an employee of the All Seasons food service company, signed an agreement in which he promised not to compete against All Seasons for three months after leaving the company.
When Newman quit, several customers sought him out for work. Several others received sales pitches from Newman. All Seasons sued, alleging breach of contract and business interference.
A Philadelphia court enforced the noncompete agreement, but it refused to rule that Newman intentionally interfered with All Seasons' business contracts. Under Pennsylvania law, contract interference requires proof that it was done with the specific intent to harm the other party, not just to steal business away. (All Seasons Services v. Newman, No. 2173, Philadelphia Court of Common Pleas, 2006)
Tip: When drafting your contracts, ask the attorney to make the noncompete period as long as possible within Pennsylvania law. Three months doesn't offer much protection when you can't make a claim of contract interference.
- No witness needed for disciplinary meeting
- How much should I worry about employees using social networking sites?
- Protect against retaliation suits by conducting independent and 'blind' internal investigations
- Employing agency determines where public employees' whistle-blower suits will be heard
- Personnel records versus investigation records