Make a Pennsylvania Non-Compete Agreement

Applicable State Laws - None

Although there are no specific laws that govern non-compete agreements in the State of Pennsylvania, the agreement should only be written in a way that protects the employer's legitimate business interests:

• Trade secrets
• Confidential information
• Goodwill
• Investments made in specialized training
• Unique or extraordinary skills

The non-compete agreement must be written only in relation to the employment relationship. It must also be reasonable in geographic scope and time.

Protect your Pennsylvania business by also using a Pennsylvania non-disclosure agreement form. Download a Pennsylvania non-disclosure agreement form now!

How to Write a Pennsylvania Non-Compete Agreement

To write a Pennsylvania non-compete agreement, include the following clauses:

• Purpose. This clause explains the purpose of the agreement: to protect the legitimate business interests of the employer. It also identifies the names and roles of the parties and the effective date.
• Non-compete. This clause explains the restrictions by which the signing party must abide: the time period, geographic area, general and specific business practices, working for general and specific competitors, and non-solicitation of customers, clients, and employees.
• Time period. This clause explains when the time period restriction begins: either when the new job begins or when it terminates.
• Purchase option. This clause states whether the business will allow the signing party to pay a certain amount to get out of the contract. If so, the amount will be listed in this clause.
• Jurisdiction. This clause is used to set Pennsylvania laws as the laws that will govern the agreements.
• Confidential information. This clause defines the term "confidential information" as technical and non-technical information provided by your business that includes, and is not limited to, any data or other proprietary information related to products, inventions, plans, methods, processes, developmental or experimental products, intellectual property, software, databases, customer lists, vendor lists, supplier lists, marketing methods, reports, business plans, financial information, or other information about the business or any of your customers, clients, or consultants disclosed under the terms of this agreement.
• Permitted disclosure. This clause explains when information that is generally protected because it is considered confidential is permitted to be disclosed without violating the terms of the non-compete agreement. Commonly permitted disclosures include when written consent is provided by the business to release specific information to the public, when the signing party discovers confidential information on their own and without a breach from another party, and when information is disclosed with no fault to the signing party.
• Confidentiality. This clause states that the signing party knows the information they may access is confidential. They agree they will not directly or indirectly communicate the information to another party without receiving written consent from the business. They also agree they will not use the information for any reason other than to further the business.
• Consultants and employees bound. This clause states that both consultants and employees are bound to keep the information they may access under the strictest of confidence. This clause also states that they are on a need-to-know basis for receiving information.
• Return of materials. This clause states that when the relationship ends or when requested by the employer, the signing party is obligated to promptly return the documents and other tangible materials that represent the confidential information of the business and any copies that exist. The business will also notify the other party if there is an unauthorized disclosure of confidential information.
• Remedies. This clause explains the legal remedies the employer is entitled to pursue by Pennsylvania law in the event the employee does not honor the obligations of the agreement. Examples include the recovery of court costs and reasonable attorney fees, the award by a Pennsylvania court of a temporary restraining order or preliminary injunction against the unauthorized use, etc., as well as all other remedies available under Pennsylvania law or as a matter of equity.
• Choice of law. This clause states that the parties agree to choose Pennsylvania law as the governing law for the agreement.
• Entire agreement. This is the final clause of the agreement. It states that the parties may amend the agreement as long as it is done so in writing and signed by both parties.

Both parties should sign and print their name as well as date their signatures. The parties should each receive a copy of the finalized agreement for their records.