Are non-compete agreements enforceable in Pennsylvania?

1. Baseline Rule. Pennsylvania has no governing statute; the leading authority is Hess v. Gebhard & Co., 808 A.2d 912 (Pa. 2002). Covenants are disfavored restraints of trade but enforceable when (a) incident to an employment relationship, (b) reasonably necessary to protect a legitimate business interest, and (c) reasonably limited in duration and geographic extent.

2. Reasonableness Factors. Legitimate interests include trade secrets, confidential information, unique skills/training, customer goodwill, and investments in employee development. Geographic scope must align with the employer's actual market. Time limits of six months to two years are typically enforced; longer durations face scrutiny.

3. Consideration. Pennsylvania is unusually strict. For new hires, the offer of employment itself is sufficient. For mid-employment covenants, Socko v. Mid-Atlantic Systems, 126 A.3d 1266 (Pa. 2015), held that continued at-will employment is NOT adequate consideration, even with a UWOA recital — the employee must receive new, valuable consideration (raise, bonus, promotion, equity).

4. Wage Thresholds. None.

5. Blue Pencil / Reformation. Pennsylvania courts may strike overbroad provisions and enforce the remainder if severable, but typically will not affirmatively rewrite the covenant.

6. Industry Carve-Outs. Lawyers are barred (Pa. RPC 5.6). Physicians: enforceable but courts weigh public-interest impact on patients heavily. Broadcasters: no statute, common-law analysis.

7. FTC Rule. Enjoined nationwide by Ryan LLC v. FTC (E.D. Tex. Aug. 2024); on appeal. Pennsylvania law continues to govern.

8. Garden Leave / Forfeiture-for-Competition. Permitted; deferred compensation forfeitures are common in finance.

9. Choice of Law. Pennsylvania courts will apply Pennsylvania law where another state's law would offend PA public policy, particularly the Socko consideration rule.

This is legal information, not legal advice.