Non-Compete & Retention Bonus.

I signed a non-compete clause with a contractor to the State of PA. The non-compete was for 1 year. This company lost the state contract and it ended on June 30th. They sent me a check to stay until the end. I started with the new company that won the contract, on July 1st. The old company had no job to offer me. Can I be legally held to the non-compete and can I accept the bonus check?

1 answer  |  asked Jul 16, 2006 3:43 PM [EST]  |  applies to Pennsylvania

Unlock Non-Compete Agreements: Keys to Escape

Answers (1)

Christopher Ezold
It is highly unlikely your noncompete is enforceable against you.

Before I respond to your inquiry, I must state that we have not spoken, I have not reviewed the relevant documents and facts, and I do not represent you. Therefore, my discussion below is not a legal opinion, but is informational only. Finally, my discussion applies only to issues to which Pennsylvania or Federal law apply, unless otherwise specified.

That being said, based on the sparse facts of your question, it is highly unlikely your noncompete is enforceable against you.

Your primary defense is that you were laid off. Pennsylvania courts generally will not enforce a noncompetition agreement against a laid-off employee, for a number of reasons, both legal and policy.

In Pennsylvania, non-compete agreements must be reasonable in their time limit, geographic limit, and must protect a 'legitimate business interest.' Generally, an employer has no 'legitimate business interest' in preventing an employee it laid off from working. This dovetails with the general policy that the government wants every citizen working; since you are being forced to leave, policy is on your side.

With regard to your bonus question, it appears that you were paid your bonus to stay through June 30th. As long as you have done so, you should be able to keep the bonus.

If you would like to discuss this matter further, please feel free to contact me at the below address(es) or number.

/Christopher E. Ezold/
Nancy O'Mara Ezold, P.C.
One Belmont Avenue
Suite 501
Bala Cynwyd, PA 19004
(610) 660-5585

posted by Christopher Ezold  |  Jul 16, 2006 4:22 PM [EST]

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