Sub-Contractor to Sub-Contrator switch

I signed a non-compete at the time of hire. I am currently a sub-contractor and would like to switch to another sub-contractor under a big contract with multiple sub-contractors. I was wondering if you could please let me know the validity of the following clause given my situation. Also, there is no geographic restriction.
"The employee will serve XXX in an exclusive capacity. Accordingly, as a condition of employment, the EMPLOYEE must agree that, in the event that his/her employment terminates for any reason, for a one year period, the employee will not, directly or indirectly, either for himself/herself of through any kind of ownership or as a director, agent, employee, representative or consultant, for any other person, firm, or corporation, call on, solicit, take away, or cause the loss of clients of XXX on whom the EMPLOYEE called or with whom he/she became acquainted during his//her employment immediately preceding the termination of employment. It is expressly agreed and understood that the remedy at law for breach of covenant is inadequate and that injunctive relief shall be available to prevent the breach thereof.

1 answer  |  asked Jun 17, 2008 3:31 PM [EST]  |  applies to Pennsylvania

Answers (1)

Christopher Ezold
The language may be enforceable.

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, the language may be enforceable. However, there are a number of areas in which a noncompetition agreement can fail; I cannot tell if your agreement is completely enforceable from one paragraph. Furthermore, you indicate that you are a subcontractor. Generally, an noncompetition agreement must be 'ancillary to an employment contract' - while they have been enforced against subcontractors who were once employees, I am aware of no case law in which they have been enforced against pure subcontractors. We would have to discuss your situation before I can determine whether this issue would be a flaw in the agreement.

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
Cezold@Ezoldlaw.com

posted by Christopher Ezold  |  Jun 17, 2008 3:59 PM [EST]

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