Win on Pa. Noncompetes Wouldn’t Give Employers Free Rein

May 4, 2015 – In The News

James A. Matthews was quoted in the Law360 article, “Win on Pa. Noncompetes Wouldn't Give Employers Free Rein.” Full text can be found in the May 4, 2015, issue, but a synopsis is below.

The Pennsylvania Supreme Court could potentially decide in an upcoming case to permit employers to allow noncompete agreements on employees without providing anything in return.

The case of first impression pits two competing portions of Pennsylvania law against each other: one that states employers may enforce a noncompete agreement as long as certain language is written into it and employees agree to be legally bound by it, and the other noting that employees must be given additional benefits when restrictions are being made on their employment.

Jim Matthews notes that, “No one goes into the transaction in sole reliance on the ‘intending to be legally bound’ language,” which stems from language in the state’s Uniform Written Obligations Act (UWOA). Rather, he says that this argument is always used as a backup plan.

It is likely that the UWOA-based argument will continue to be used if the ruling is overturned by the Supreme Court.