The Pennsylvania Legislature has not created laws that regulate solicitation bans. Over time, however, Pennsylvania courts have considered restrictive agreements such as non-compete clauses and solicitation bans. To be valid and enforceable, these agreements must have reasonable limits. Pennsylvania courts have ruled that a non-solicitation agreement must contain appropriate restrictions to be valid and enforceable. But what constitutes an appropriate restriction under Pennsylvania law? For example, Pennsylvania courts have refused to enforce the non-solicitation agreement for customers in the following situations: Often, a non-solicitation agreement is part of a larger document. B, for example, an employment contract. When this happens, it can sometimes be difficult to understand exactly what is right for you. The agreements contain advanced legal terms and complex language that is intentionally difficult to understand. Pittsburgh Logistics Systems, Inc. (“PLS”) is an external logistics service provider that arranges the shipment of its customers` cargo with selected freight forwarding companies. PLS has engaged Beemac Trucking (“Beemac”) to provide such shipping services, and the two have entered into an agreement containing the following non-solicitation and non-rental provisions: a competitive effect may also switch in the other direction. If a non-solicitation agreement has little impact on competition, it may be valid or enforceable in Pennsylvania. The most common example of a restrictive agreement is a non-compete clause that restricts a former employee`s future employment opportunities.
Other restrictions include trade secret protection and poaching bans, which aim to prohibit former employees from attracting the employer`s clients or trying to hire former colleagues. Poaching prohibitions are intended to prevent former employees from bringing an employer`s employee(s) to the former employee`s new employer. There are two types of solicitation prohibitions. Customer poaching bans prohibit former employees from contacting the employer`s customers. Employee poaching bans prohibit former employees from asking former colleagues to leave the employer and join a new employer. In the absence of a non-solicitation agreement, an employee is usually free to leave an employer and recruit the former employer`s clients and hire the employer`s employees. In Pennsylvania, non-solicitation agreements are enforceable if the agreement relates to an employment relationship between the employer and the employee. the agreement is supported by a quid pro quo, which may include an initial offer of employment or a favourable increase in working and employment conditions; the agreement is reasonably necessary to protect the legitimate interests of the employer; the agreement shall be proportionate in terms of duration and geographical scope. During the term of this agreement, Beemac hired four PLS employees. PLS then sued Beemac for breach of contract, among others.
PLS also filed an action against the four former employees for breach of contract, claiming that they had violated the non-competition and non-solicitation provisions of their employment contracts. For example, a valid non-solicitation agreement could define customers as all paying customers in the 12 months prior to the employee`s departure. Or the employer could define customers as the former employee`s business book. A Pennsylvania non-solicitation agreement is a contract between an employer and an employee that prevents the employee from poaching the affairs of the employer`s clients after the employment relationship has ended. These contracts cover a specific period and geographical area. A non-solicitation agreement is a type of restrictive agreement that protects an employer`s business relationship. Poaching bans typically include existing and potential customers as well as suppliers and vendors. For a predetermined period after termination, former employees are unable to recruit customers or suppliers from their former employer. As pennsylvania courts have noted, the protection of a legitimate business interest may justify a non-solicitation agreement. The conduct prohibited under the non-solicitation agreement must be reasonable in nature. The employer may not restrict the employee`s freedoms in unnecessarily broad or vague terms.
While non-poaching of employee agreements may be legal in Pennsylvania, the courts have also established a number of guidelines. In particular, the courts are trying to assess the competitive effects of solicitation prohibitions. In the absence of defined laws on the subject, Pennsylvania courts will interpret whether the agreement is valid and enforceable. Above all, the prohibition on seeking workers` agreements must be proportionate in order to resist judicial review. After leaving Metalico, the two executives began to attract Metalico`s suppliers to their new employer. Metalico has filed a lawsuit to enforce non-solicitation provisions in expired employment contracts. The court of first instance ruled in favor of the executives and refused to enforce the solicitation bans because, after the expiration of the employment contracts, they were “replaced by unlimited relationships that did not contain non-solicitation provisions.” The Pennsylvania Legislature has yet to create laws specifically regarding solicitation bans. However, Pennsylvania courts have ruled that a non-solicitation agreement is enforceable if: The Pennsylvania Supreme Court recently ruled on a first-impression issue regarding “non-hiring” (or “non-poaching”) provisions in commercial contracts between two companies. In such agreements, a company undertakes not to recruit or hire the other`s employees for a certain period of time.
The issue in Pittsburgh Logistics Systems, Inc.c. Beemac Trucking, LLC and Beemac Logistics, LLC, 2021 WL 1676399 (Pa. April 29, 2021) was “whether it is non-hiring or `non-poaching,` provisions that are enforceable under Pennsylvania law in addition to a business-to-business service agreement.” The court dodged this broader question, simply ruling that the non-hiring provision in this case was too broad and therefore unenforceable – leaving the door open to non-employment provisions more narrowly tailored to be declared enforceable. This decision underscores an important consideration for companies doing business in Pennsylvania: the Commonwealth strongly opposes agreements restricting trade, and Pennsylvania courts will not apply restrictive agreements broader than necessary to protect the legitimate interests of the party seeking enforcement. If the non-solicitation agreement your boss made you sign isn`t related to your employment relationship, for example, if it.B has nothing to do with the type of work you were hired for, that item can`t be filled out and the agreement is unenforceable. HKM Employment Attorneys in Pittsburgh, Pennsylvania, has received numerous awards in the field of labor law. Leveraging unique mastery of the law and unparalleled service, HKM Employment Attorneys fights against companies ranging from the Fortune 100 to small businesses. If you have any questions about non-solicitation of clients or other aspects of labour law, please do not hesitate to contact us today. At Pittsburgh Logistics, Pittsburgh Logistics Systems (PLS), an external logistics service provider that arranges the shipment of its customers` cargo with selected transportation companies, has entered into an agreement with Beemac Trucking, a shipping company, to provide shipping services to PLS customers. In addition to a non-solicitation provision prohibiting Beemac from recruiting PLS clients, the agreement included a non-employment provision prohibiting Beemac from hiring, directly or indirectly, during the term of the contract and for two years thereafter, to solicit employment or to induce or attempt to terminate employees of PLS or one of its affiliates to leave its employment relationship with PLS or the affiliate. .