Business Law · Non-Compete Agreements

How to Challenge a Non-Compete Agreement in Pennsylvania

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You can challenge a non-compete agreement in Pennsylvania, but the real question is whether your employer will try to stop you before you even start your next job. Some employees assume non-compete agreements are no longer enforceable because of recent federal efforts to restrict or ban them, but that is not the current law. There is no nationwide ban in effect, and Pennsylvania courts continue to enforce valid non-competes while rejecting or narrowing agreements that go too far. Courts will not enforce restrictions that go beyond what is reasonably necessary, and many agreements can be narrowed or invalidated. If you are planning to leave a job or have already been threatened with enforcement, timing and strategy matter, and acting early before your employer files for an injunction can significantly improve your leverage and outcome.

Lebovitz & Lebovitz regularly represents employees and businesses in non-compete disputes throughout Pittsburgh and western Pennsylvania. For the full framework of how Pennsylvania courts evaluate these agreements, see our page on non-compete agreements in Pennsylvania. For injunction defense and enforcement, see non-compete injunctions.

Lack of Consideration: The Most Common Defect

The most frequent reason non-compete agreements fail in Pennsylvania is lack of adequate consideration. Consideration is the legal term for what the employee received in exchange for agreeing to the restriction.

If the non-compete was signed at the time of initial hiring, the job itself typically constitutes sufficient consideration. The agreement was part of the deal from day one.

If the non-compete was presented after the employee had already started working, continued employment alone is not adequate consideration. Pennsylvania courts require something beyond keeping the job you already have. A promotion, a raise, a bonus, access to restricted information, or a material change in job responsibilities can qualify. A signature obtained during an all-staff meeting with no new benefit attached is vulnerable to challenge.

This is the defect to examine first. If the agreement was signed mid-employment and the employer cannot point to new consideration provided at that time, the entire agreement may be unenforceable regardless of how reasonable its terms appear.

What Makes a Non-Compete Enforceable in Pennsylvania

Pennsylvania courts apply a three-part test to determine enforceability. All three elements must be satisfied. If any element fails, the court can void or modify the agreement.

Consideration. The employee must have received adequate consideration at the time of signing, as described above.

Legitimate business interest. The employer must demonstrate that the restriction protects something the law recognizes as worth protecting: trade secrets, confidential business information, client or customer relationships developed during employment, or specialized training provided at the employer’s expense. A general desire to prevent competition is not a legitimate interest. Restricting an employee who had no access to proprietary information or client relationships is difficult to justify.

Reasonableness. The restriction must be reasonable in duration, geographic scope, and the activities it prohibits. Courts evaluate reasonableness based on what is necessary to protect the identified business interest, not what the employer would prefer. A two-year restriction on soliciting clients the employee directly managed may be reasonable. A five-year ban on working in any capacity for any competitor anywhere in the state is almost certainly not.

Overbroad Duration or Geographic Scope

Overbroad restrictions are the second most common basis for challenging a non-compete in Pennsylvania. Courts regularly narrow or void agreements where the employer overreached.

Pennsylvania courts generally view one to two years as the outer boundary of enforceability for most non-compete agreements. Restrictions exceeding two years face heavy scrutiny and are often reduced. The appropriate duration depends on the industry, the employee’s role, and how quickly the protected information or relationships would become stale.

The restricted area must correspond to the territory where the employer actually conducts business or where the employee had client contact. A company that operates in western Pennsylvania cannot enforce a restriction that covers the entire eastern seaboard. Courts look at where the employer’s customers are located and where the employee actually worked, not where the employer might someday want to expand.

The restriction must also be limited to the type of work that would actually threaten the employer’s protected interest. An agreement that prohibits the employee from working in any capacity at a competitor, including roles unrelated to the protected interest, is more vulnerable than one that restricts only direct competition in the same function.

When a court finds a restriction overbroad, Pennsylvania follows the blue-pencil doctrine. Rather than voiding the agreement entirely, the court may modify it to make it reasonable. This means an overbroad agreement may still result in some restriction, just a narrower one than the employer originally imposed.

Challenging a Non-Compete After Termination

The circumstances of the employee’s departure can directly affect enforceability.

When an employer terminates an employee without cause and then attempts to enforce a non-compete, courts scrutinize the restriction more closely. Some Pennsylvania courts have held that enforcement after a no-cause termination is unreasonable, particularly when the employee was given no severance or transition period.

If the employer breached the employment agreement, failed to pay wages or commissions owed, or engaged in conduct that forced the employee to resign, the non-compete may be unenforceable. An employer that violates its own obligations undermines its position in seeking to enforce the employee’s obligations.

Pennsylvania Act 74 of 2024 prohibits enforcement of non-compete agreements against most healthcare practitioners. The restriction cannot exceed one year, and if the healthcare professional is terminated by the employer, the non-compete is void entirely. This is a statutory override that applies regardless of what the agreement says.

If the employee can demonstrate that working conditions were so intolerable that a reasonable person would have resigned, the resignation may be treated as an involuntary termination, weakening the employer’s ability to enforce the restriction.

Can You Ignore a Non-Compete or Will You Be Sued

The practical question most employees ask is whether their employer will actually enforce the agreement. The answer depends on what the employer stands to lose.

Employers are most likely to seek enforcement when the departing employee has direct client relationships, access to trade secrets or proprietary systems, or is joining a direct competitor in the same market. The employer may file for a temporary restraining order or preliminary injunction within days of learning about the new position. A TRO can be granted without notice to the employee. A preliminary injunction hearing typically occurs within weeks.

Employers are less likely to enforce when the employee is junior, had no client contact, had no access to proprietary information, or is moving to a role that does not directly compete. Enforcement costs money, and many employers make a business decision not to pursue marginal claims.

The risk of ignoring a non-compete without legal evaluation is that if the employer does file, the injunction timeline moves fast. Courts can issue temporary orders that prevent the employee from starting or continuing the new position while the case is litigated. Being caught without a strategy after an injunction is filed puts the employee in the weakest possible position.

What to Do Before You Leave Your Job

The strongest position for challenging a non-compete is before you leave, not after your employer files for an injunction.

Read the actual document. Many employees signed a non-compete years ago and do not remember the specific terms. Identify the duration, geographic scope, activity restrictions, and what consideration was provided at the time of signing.

Look for defects. Was the agreement signed after your first day of employment? If so, what new consideration was provided? Is the geographic scope broader than the employer’s actual market? Is the duration longer than necessary to protect any legitimate interest? Is the activity restriction so broad that it prevents you from working in your field entirely?

Assess your exposure. Consider what the employer actually has at stake. Did you have direct client relationships? Do you have access to trade secrets or proprietary systems? Is the new position with a direct competitor in the same market? The answers determine how likely the employer is to pursue enforcement.

Some employers will agree to waive or narrow the non-compete as part of a departure negotiation, particularly when the employee has leverage such as a clean departure, a transition plan, or knowledge of defects in the agreement that would make litigation risky for the employer.

An attorney who handles non-compete matters can evaluate the agreement, identify the strongest grounds for challenge, and help structure the departure to minimize enforcement risk. This is significantly less expensive and more effective than responding to an injunction after the fact.

If you are dealing with a non-compete issue, the difference between acting early and reacting after an injunction is filed can determine whether you keep your new job.

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Lebovitz & Lebovitz, P.A. · A Pittsburgh Law Firm Est. 1933. Serving Pittsburgh and southwestern Pennsylvania.

Reviewed by Stephen H. Lebovitz, Esq.