Non-Compete Agreement – Plaintiff Wins Declaratory Injunction Voiding Non-Compete Agreement for Lack of Consideration

Employees confronted with non-compete agreements often face an impossible situation. Even though there is an emerging trend in Pennsylvania courts where non-compete agreements are being voided, the cost of litigation often precludes employees from taking affirmative action. A recent Allegheny County case, Bosses v. Servicelink, C. C. P. Allegheny City, G.D. No. 12-012206 (Ward J.), shows that where a Plaintiff has sufficient resources to take affirmative action, a plaintiff’s declaratory judgment may be granted based upon established law.

In Bosses, the plaintiff began working for one company in a clerical position and rose to a Vice President position by the time the company was acquired by another company. At the time of the acquisition, the Plaintiff received a number of documents but did not sign the noncompete agreement until one month later when he was told he would lose his job if he did not sign. Several years later the Plaintiff received a job offer from another company, contingent upon becoming unencumbered by the non-compete.

The Court relied upon many principals Plaintiffs can rely upon to invalidate restrictive covenants: the loss of a business opportunity may be characterized as an irreparable injury, Santoro v. Morse, 781 A.2d 1220, 1227-28 (Pa.Super. 2001); an employee has an important interest in being able to earn a living in his chosen profession.” All-Pak, Inc. v. Johnston, 694 A.2d 347, 351 (Pa.Super. 1997); and restrictive covenants are not favored in Pennsylvania, as they can be seen as a trade restraint preventing a former employee from earning a living. Hess v. Gebhard & Co, 808 A.2d 912, 920 (Pa. 2002). Ultimately, in Bosses, the court cited established law concluding that “a restrictive covenant will not be enforced if no consideration was exchanged for its execution.” Shepherd v. Pittsburgh Glass Works, LLC, 25 A.3d 1233, 1243 (Pa.Super. 2011.

Bosses shows that when an employee has the resources to take affirmative action, established appellate law in Pennsylvania can lead to positive results. Unfortunately, when an employee is not an executive, the end result can be much different, solely as a consequence of not having the resources to take on a well financed corporation. This is a key difference between non-compete litigation and a typical employment discrimination case, where the Plaintiff is solely seeking money damages. Fortunately, Plaintiffs in employment discrimination cases often have the support of attorneys willing to enter into contingency fee agreements which can make the playing field more equal.

For more information on non-compete agreements and Abramson Employment Law see http://www.job-discrimination.com/lawyer-attorney-1134689.html

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