Are employee non-compete agreements enforceable in Pennsylvania?
Yes, sometimes. Pennsylvania is a reasonableness state, not a general ban state, but its courts are historically hostile to restraints on trade. A non-compete is enforceable only if it is ancillary to an employment relationship, supported by adequate consideration, reasonably limited in time and territory, and designed to protect a legitimate business interest of the employer.
The modern statement of the test comes from Socko v. Mid-Atlantic Systems of CPA, Inc., where the Pennsylvania Supreme Court restated the four requirements every covenant must meet . The framework traces back to Morgan's Home Equipment Corp. v. Martucci, which held that a post-employment covenant is only prima facie enforceable when it is reasonably limited as to duration and geographic extent .
Pennsylvania has not enacted a general non-compete statute for the ordinary workforce. The core analysis is judge-made, with one significant statutory exception for health care practitioners covered later in this note.
Do not treat Pennsylvania as either a free-for-all or a ban state. Confirm the covenant is ancillary and supported by consideration, then test it for reasonableness in time, territory, and protectable interest, because Pennsylvania courts scrutinize restraints closely.
Sources for this answer
Case law · 2015-11-18
A.1 Socko v. Mid-Atlantic Systems of CPA, Inc.Socko restates Pennsylvania's four-part rule that a restrictive covenant is enforceable only if it is ancillary to employment, supported by adequate consideration, reasonably limited, and designed to protect the employer's legitimate interests.
Consistent with this legal background, currently in Pennsylvania, restrictive covenants are enforceable only if they are: (1) ancillary to an employment relationship between an employee and an employer; (2) supported by adequate consideration; (3) the restrictions are reasonably limited in duration and geographic extent; and (4) the restrictions are designed to protect the legitimate interests of the employer.
See Socko v. Mid-Atlantic Systems of CPA, Inc., 126 A.3d 1266 (Pa. 2015).
Case law · 1957-11-22
A.2 Morgan's Home Equipment Corp. v. MartucciMorgan's Home Equipment supports that a post-employment covenant is only prima facie enforceable when reasonably limited in duration and geographic extent.
We have held that employment contracts containing general covenants by an employe not to compete after the termination of his employment are prima facie enforcible if they are reasonably limited as to duration of time and geographical extent.
See Morgan's Home Equipment Corp. v. Martucci, 136 A.2d 838 (Pa. 1957).
Is continued at-will employment enough consideration for a Pennsylvania non-compete?
No, not by itself, for an existing employee. When a covenant is added after employment has begun, it is enforceable only if the employee receives new and valuable consideration beyond merely keeping the job.
In Socko, the Pennsylvania Supreme Court confirmed that a mid-employment restraint requires new and valuable consideration — a corresponding benefit or a beneficial change in employment status — not just continued at-will employment . The rule predates Socko: in Maintenance Specialties, Inc. v. Gottus, the court held that continued employment is not sufficient consideration for a covenant signed after employment began .
Socko also closed a drafting loophole. Employers had relied on the Uniform Written Obligations Act, which lets a signed writing reciting an intent to be legally bound stand without consideration. The court held that this statutory recital does not cure a missing consideration in the restrictive-covenant context .
A separate timing rule governs covenants signed shortly after the first day of work. In Rullex Co. v. Tel-Stream, Inc., the court held that a covenant executed after the first day is enforceable without new consideration only if the parties agreed to its essential provisions at the start of the relationship . Otherwise, as George W. Kistler, Inc. v. O'Brien put it, a later-added covenant must be supported by new consideration .
Do not rely on continued at-will employment, or on an intend to be legally bound recital, when an existing Pennsylvania employee signs a new covenant. Tie the signature to identifiable new consideration such as a raise, bonus, or promotion, and document it, because the recital did not save the agreement in Socko.
Sources for this answer
Case law · 2015-11-18
B.1 Socko v. Mid-Atlantic Systems of CPA, Inc.Socko supports that a covenant required mid-employment is enforceable only with new and valuable consideration beyond mere continued employment.
In the context of requiring an employee to agree to a restrictive covenant mid-employment, however, such a restraint on trade will be enforceable only if new and valuable consideration, beyond mere continued employment, is provided and is sufficient to support the restrictive clause.
See Socko v. Mid-Atlantic Systems of CPA, Inc., 126 A.3d 1266 (Pa. 2015).
Case law · 2015-11-18
B.3 Socko v. Mid-Atlantic Systems of CPA, Inc.Socko supports that the Uniform Written Obligations Act's intend-to-be-legally-bound recital does not cure a lack of consideration for a restrictive covenant.
we conclude that a construction of the UWOA which would vitiate the need for new and valuable consideration when entering into an agreement containing a restrictive covenant after the initiation of employment would be unreasonable.
See Socko v. Mid-Atlantic Systems of CPA, Inc., 126 A.3d 1266 (Pa. 2015).
Case law · 1974-01-25
B.2 Maintenance Specialties, Inc. v. GottusMaintenance Specialties supports that continued employment is not sufficient consideration for a covenant signed after employment began.
An employee's continued employment is not sufficient consideration for a covenant not to compete which the employee signed after the inception of his employment, where the employer makes no promise of continued employment for a definite term.
See Maintenance Specialties, Inc. v. Gottus, 314 A.2d 279 (Pa. 1974).
Case law · 2020-06-16
B.4 Rullex Co. v. Tel-Stream, Inc.Rullex supports that a covenant signed after the first day of work is enforceable without new consideration only if the parties agreed to its essential provisions at the start of employment.
From the foregoing it should be evident that, for a restrictive covenant executed after the first day of employment to be enforceable absent new consideration, the parties must have agreed to its essential provisions as of the beginning of the employment relationship.
See Rullex Co. v. Tel-Stream, Inc., 232 A.3d 620 (Pa. 2020).
Case law · 1975-10-30
B.5 George W. Kistler, Inc. v. O'BrienKistler supports that a covenant agreed upon after the initial contract must be supported by new consideration.
While a restrictive covenant, in order to be valid need not appear in the initial contract, if it is agreed upon at some later time it must be supported by new consideration.
See George W. Kistler, Inc. v. O'Brien, 347 A.2d 311 (Pa. 1975).
What legitimate business interests can support a Pennsylvania non-compete?
Genuinely specialized training and trade secrets are the clearest examples, alongside confidential information and customer goodwill. A covenant that exists only to suppress ordinary competition is not protecting anything Pennsylvania law recognizes.
Morgan's Home Equipment identified the kinds of interests an employer may guard, including the specialized training, skills, and carefully guarded methods that amount to trade secrets of a particular enterprise . Those covenants are enforced only so far as reasonably necessary to protect the employer .
The emphasis on specialized training matters. Courts distinguish a real, proprietary investment by the employer from ordinary on-the-job experience or general sales technique, which an employee remains free to use elsewhere. The same tailoring requirement applies to covenants built on customer goodwill or confidential information: the restraint must track the specific relationships or information the employer actually needs to protect, not competition in general.
Do not use a Pennsylvania non-compete to block competition that is disconnected from a protectable interest. Tie the restraint to specific trade secrets, confidential information, customer goodwill, or genuinely specialized training, because a covenant aimed at ordinary competition is not reasonably necessary to protect the employer.
Sources for this answer
Case law · 1957-11-22
C.1 Morgan's Home Equipment Corp. v. MartucciMorgan's Home Equipment supports that specialized training, skills, and guarded methods that are trade secrets are protectable interests.
An employe may receive specialized training and skills, and learn the carefully guarded methods of doing business which are the trade secrets of a particular enterprise.
See Morgan's Home Equipment Corp. v. Martucci, 136 A.2d 838 (Pa. 1957).
Case law · 1957-11-22
C.2 Morgan's Home Equipment Corp. v. MartucciMorgan's Home Equipment supports that covenants protecting these interests are enforced only as reasonably necessary for the employer's protection.
They are enforced by the courts as reasonably necessary for the protection of the employer.
See Morgan's Home Equipment Corp. v. Martucci, 136 A.2d 838 (Pa. 1957).
What duration and geographic scope are reasonable for a Pennsylvania non-compete?
Outside Act 74's health care rules, there is no statutory cap. Pennsylvania courts permit enforcement only where the covenant is incident to employment, reasonably necessary to protect the employer, and reasonably limited in both duration and geographic extent.
Sidco Paper Co. v. Aaron states the standard: post-employment restraints are enforced only when they are incident to the employment relationship, reasonably necessary to protect the employer, and reasonably limited in duration and geographic extent . The Supreme Court reaffirmed in Pittsburgh Logistics Systems, Inc. v. Beemac Trucking, LLC that a court weighs the reasonableness of the restraint's geographic scope together with its duration .
Because the analysis is holistic, time and territory are measured against the employer's actual market and the interest being protected. A restraint matched to where the employer competes and to the time needed to protect a relationship is far easier to defend than a long, open-ended, statewide ban.
Do not copy a fixed term or radius from another form. Match the duration and territory to the employee's role and the employer's real market, because a Pennsylvania court evaluates the restraint as a whole and there is no safe-harbor number.
Sources for this answer
Case law · 1976-01-29
D.1 Sidco Paper Co. v. AaronSidco supports that post-employment restraints are enforced only where incident to employment, reasonably necessary to protect the employer, and reasonably limited in duration and geographic extent.
Our courts will permit the equitable enforcement of post-employment restraints only where they are incident to an employment relation between the parties to the covenant, the restrictions are reasonably necessary for the protection of the employer, and the restrictions are reasonably limited in duration and geographic extent.
See Sidco Paper Co. v. Aaron, 351 A.2d 250 (Pa. 1976).
Case law · 2021-04-29
D.2 Pittsburgh Logistics Systems, Inc. v. Beemac Trucking, LLCBeemac supports that courts consider the reasonableness of a restraint's geographic scope together with its duration.
As part of this balancing test, courts also consider the reasonableness of the restraint’s geographical scope as well as its duration of time.
See Pittsburgh Logistics Systems, Inc. v. Beemac Trucking, LLC, 249 A.3d 918 (Pa. 2021).
Will a Pennsylvania court blue-pencil or reform an overbroad non-compete?
Sometimes, but do not count on it. A Pennsylvania court of equity may enforce only the reasonable portions of an overbroad covenant, yet it will scrutinize the restraint closely and may decline to rewrite a covenant drafted far broader than necessary.
Sidco Paper confirms the power: where a covenant imposes restrictions broader than necessary, a court of equity may grant enforcement limited to the portions that are reasonably necessary to protect the employer . But the power is bounded. In Reading Aviation Service, Inc. v. Bertolet, the Supreme Court explained that freely rewriting overbroad covenants would encourage employers with superior bargaining power to insist on excessive restrictions, secure in the knowledge that a court will simply pare them back . Pennsylvania courts therefore subject these covenants to close scrutiny .
Do not rely on a Pennsylvania court to rescue an aggressive covenant. Draft tiered, severable, reasonable restraints, because reformation is discretionary and a court may refuse to narrow a covenant it sees as gratuitously overbroad.
Sources for this answer
Case law · 1976-01-29
E.1 Sidco Paper Co. v. AaronSidco supports that a court of equity may grant enforcement limited to the portions of an overbroad covenant that are reasonably necessary to protect the employer.
However, where the covenant imposes restrictions broader than necessary to protect the employer, we have repeatedly held that a court of equity may grant enforcement limited to those portions of the restrictions which are reasonably necessary for the protection of the employer.
See Sidco Paper Co. v. Aaron, 351 A.2d 250 (Pa. 1976).
Case law · 1973-11-26
E.2 Reading Aviation Service, Inc. v. BertoletReading Aviation supports that courts are wary of rewriting overbroad covenants because doing so encourages employers to insist on excessive restrictions.
The objection to such a practice is that it tends to encourage employers and purchasers possessing superior bargaining power over that of their employees and vendors to insist upon unreasonable and excessive restrictions, secure in the knowledge that the promise may be upheld in part, if not in full.
See Reading Aviation Service, Inc. v. Bertolet, 311 A.2d 628 (Pa. 1973).
Case law · 1973-11-26
E.3 Reading Aviation Service, Inc. v. BertoletReading Aviation supports that Pennsylvania courts subject employee non-competition covenants to close scrutiny because of unequal bargaining positions.
Because of the inherently unequal bargaining positions of the parties, we have consistently subjected covenants of non-competition between employees and their employers to close scrutiny.
See Reading Aviation Service, Inc. v. Bertolet, 311 A.2d 628 (Pa. 1973).
Does it matter whether the employer or the employee ended the employment?
Yes. How the employment ended is an important factor. A Pennsylvania court is markedly less willing to enforce a covenant against an employee the employer fired for failing to do the job than against one who voluntarily left.
In Insulation Corp. of America v. Brobston, the Superior Court drew a sharp line between an employee who voluntarily leaves and one who is terminated for failing to do his job . Where an employer fires an employee for failing to promote the employer's legitimate business interests, the court reasoned, the employer has effectively decided that its interests are better served without that employee — which undercuts the claim that it still needs a covenant to protect those same interests .
Do not assume a Pennsylvania covenant is enforceable after the employer terminates the employee. Where the discharge is for poor performance, the circumstances of termination weigh heavily against enforcement, so weigh that risk before suing a fired employee on a non-compete.
Sources for this answer
Case law · 1995-11-03
F.1 Insulation Corp. of America v. BrobstonBrobston supports that there is a significant distinction between enforcing a covenant against an employee who voluntarily leaves and one terminated for failing to do the job.
It bears noting that there is a significant factual distinction between the hardship imposed by the enforcement of a restrictive covenant on an employee who voluntarily leaves his employer and that imposed upon an employee who is terminated for failing to do his job.
See Insulation Corp. of America v. Brobston, 667 A.2d 729 (Pa. Super. 1995).
Case law · 1995-11-03
F.2 Insulation Corp. of America v. BrobstonBrobston supports that an employer who fires an employee for failing to promote its business interests has implicitly decided those interests are best served without the employee.
Where an employee is terminated by his employer on the grounds that he has failed to promote the employer's legitimate business interests, it clearly suggests an implicit decision on the part of the employer that its business interests are best promoted without the employee in its service.
See Insulation Corp. of America v. Brobston, 667 A.2d 729 (Pa. Super. 1995).
How does Pennsylvania treat customer non-solicitation and no-accept clauses?
Sometimes. Narrow customer non-solicitation clauses can be enforceable, but a recent non-precedential Superior Court decision read solicit to require an affirmative act and treated a clause as overbroad where it lacked a geographic limit and barred an employee from merely accepting business.
A 2026 Superior Court memorandum, First National Trust Co. v. English, illustrates the limits. The court held that the verbs solicit, divert, and entice each require an affirmative act, so an employee who merely accepts business from clients who seek him out has not breached . It found the non-solicitation clause unenforceable as written because it had no geographic scope . The court also declined to extend the restriction to customers whose relationships predated their advisor's employment .
English is a non-precedential memorandum, so it does not bind future panels, but it reflects how Pennsylvania courts apply settled reasonableness principles to non-solicitation and no-accept language.
Do not draft a Pennsylvania non-solicitation clause that bars merely accepting business or that omits a geographic limit. Restrict the clause to affirmative solicitation of customers the employee actually served, because a no-accept or geographically unbounded clause invites a finding that it is unenforceable as written.
Sources for this answer
Case law · 2026-02-18
G.1 First National Trust Co. v. EnglishPDFEnglish supports that the terms solicit, divert, and entice each require an affirmative act, so passively accepting business is not solicitation.
Significantly, the terms “solicit”, “divert,” and “entice” are verbs, with each requiring an affirmative act.
See First National Trust Co. v. English, No. 1109 WDA 2025 (Pa. Super. Feb. 18, 2026) (non-precedential).
Case law · 2026-02-18
G.2 First National Trust Co. v. EnglishPDFEnglish supports that a non-solicitation clause lacking any geographic scope is unenforceable as written.
Thus, the non-solicitation clause is unenforceable as written.
See First National Trust Co. v. English, No. 1109 WDA 2025 (Pa. Super. Feb. 18, 2026) (non-precedential).
Case law · 2026-02-18
G.3 First National Trust Co. v. EnglishPDFEnglish supports that it is unreasonable to extend a restrictive covenant to customers whose relationships predated the employee's employment.
Keeping in mind that Pennsylvania law disfavors restrictive covenants, see Socko, we conclude that it would be unreasonable to include the customers of Advisors, whose relationships predated each advisor’s employment with Appellant.
See First National Trust Co. v. English, No. 1109 WDA 2025 (Pa. Super. Feb. 18, 2026) (non-precedential).
Does a Pennsylvania non-compete toll or extend during breach or litigation?
This is an unsettled Pennsylvania question. No Pennsylvania statute or appellate decision discussed in this note squarely endorses automatically tolling or extending the restricted period while the former employee is in breach or while litigation is pending.
Pennsylvania law gives signals rather than a rule. Any clause that extends the restricted period must still be reasonably necessary to protect the employer and reasonably limited in duration, so an open-ended extension risks being found unreasonable . And because a covenant is only prima facie enforceable when it is reasonably limited as to time, a clause that effectively lengthens the restraint each time the employer alleges a breach sits in tension with that requirement .
A contractual extension-on-breach clause is therefore fact-dependent in Pennsylvania. It is most defensible when tied to the duration of an actual breach and a legitimate interest, rather than written as an automatic, indefinite extension.
Open question: Pennsylvania law is unsettled on whether an extension-on-breach or tolling clause is enforceable after the original restricted period expires. Draft any such clause as a separate, reasonable restraint tied to the breach, and do not assume a Pennsylvania court will automatically extend an expired covenant.
Sources for this answer
Case law · 1976-01-29
H.1 Sidco Paper Co. v. AaronSidco supports that any restraint, including an extension of the restricted period, must be reasonably necessary to protect the employer and reasonably limited in duration.
Our courts will permit the equitable enforcement of post-employment restraints only where they are incident to an employment relation between the parties to the covenant, the restrictions are reasonably necessary for the protection of the employer, and the restrictions are reasonably limited in duration and geographic extent.
See Sidco Paper Co. v. Aaron, 351 A.2d 250 (Pa. 1976).
Case law · 1957-11-22
H.2 Morgan's Home Equipment Corp. v. MartucciMorgan's Home Equipment supports that a covenant is only prima facie enforceable when reasonably limited as to duration, which cuts against an open-ended extension.
We have held that employment contracts containing general covenants by an employe not to compete after the termination of his employment are prima facie enforcible if they are reasonably limited as to duration of time and geographical extent.
See Morgan's Home Equipment Corp. v. Martucci, 136 A.2d 838 (Pa. 1957).
Are non-competes for health care practitioners restricted in Pennsylvania?
Yes. The Fair Contracting for Health Care Practitioners Act (Act 74 of 2024), effective January 1, 2025, voids non-compete covenants longer than one year for covered practitioners and voids a covenant of any length when the employer dismisses the practitioner.
Under the Act, a noncompete covenant entered into after its effective date is contrary to public policy and void and unenforceable by an employer . The one exception is narrow: an employer may enforce a covenant only if it runs no more than one year and the practitioner was not dismissed by the employer .
The Act covers a defined set of practitioners — medical doctors, doctors of osteopathy, certified registered nurse anesthetists, certified registered nurse practitioners, and physician assistants . Separately, when a covered practitioner leaves, the employer must notify patients the practitioner saw within the past year — where there was an ongoing outpatient relationship of at least two years — within 90 days of the departure . The Act also does not bar a contract provision letting an employer recover reasonable, practitioner-specific expenses such as relocation, training, and patient-base establishment costs accrued within the three years before separation, amortized over up to five years, although that recovery is unavailable when the employer dismisses the practitioner.
Do not apply ordinary reasonableness analysis to a covered health care non-compete. For a covered practitioner, Act 74 voids any covenant longer than one year and any covenant at all where the employer did the dismissing, regardless of how reasonable the terms look.
Sources for this answer
Primary law
I.1 Fair Contracting for Health Care Practitioners Act § 4(a)Act 74 makes a noncompete covenant entered into after its effective date contrary to public policy and void and unenforceable by an employer, except as provided in the exception.
(a) Applicability.--Except as provided under subsection (b), a noncompete covenant entered into after the effective date of this subsection is deemed contrary to the public policy and is void and unenforceable by an employer.
See Fair Contracting for Health Care Practitioners Act, Act of July 17, 2024, P.L. 846, No. 74, § 4(a) (Pa.).
Primary law
I.2 Fair Contracting for Health Care Practitioners Act § 4(b)Act 74 permits enforcement only if the covenant is no more than one year and the practitioner was not dismissed by the employer.
(b) Exception.--An employer may enforce a noncompete covenant if the length of the noncompete covenant is no more than one year, provided that the health care practitioner was not dismissed by the employer.
See Fair Contracting for Health Care Practitioners Act, Act of July 17, 2024, P.L. 846, No. 74, § 4(b) (Pa.).
Primary law
I.3 Fair Contracting for Health Care Practitioners Act § 3Act 74 defines the covered health care practitioners as medical doctors, doctors of osteopathy, certified registered nurse anesthetists, certified registered nurse practitioners, and physician assistants.
"Health care practitioner." The following: (1) A medical doctor as defined in section 2 of the act of December 20, 1985 (P.L.457, No.112), known as the Medical Practice Act of 1985. (2) A doctor of osteopathy under the act of October 5, 1978 (P.L.1109, No.261), known as the Osteopathic Medical Practice Act. (3) A certified registered nurse anesthetist as defined in section 2(16) of the act of May 22, 1951 (P.L.317, No.69), known as The Professional Nursing Law. (4) A certified registered nurse practitioner as defined in section 2(12) of The Professional Nursing Law. (5) A physician assistant as defined in section 2 of the Osteopathic Medical Practice Act or section 2 of the Medical Practice Act of 1985.
See Fair Contracting for Health Care Practitioners Act, Act of July 17, 2024, P.L. 846, No. 74, § 3 (Pa.).
Primary law
I.4 Fair Contracting for Health Care Practitioners Act § 5(b)Act 74 requires an employer to notify a departing practitioner's recent patients within 90 days of the departure.
(b) Time period.--The employer shall provide the notice within 90 days of the health care practitioner's departure.
See Fair Contracting for Health Care Practitioners Act, Act of July 17, 2024, P.L. 846, No. 74, § 5(b) (Pa.).
Are business-to-business no-hire clauses enforceable in Pennsylvania?
Generally no. In Pittsburgh Logistics Systems, Inc. v. Beemac Trucking, LLC, the Pennsylvania Supreme Court held that a no-hire clause between two businesses was unreasonably in restraint of trade and unenforceable.
The clause in Beemac barred one company from hiring the other's employees during their contract and for two years after. Balancing the company's interest against the clause's overbreadth and the likelihood of harm to the public, the court found it an unreasonable restraint of trade . The court emphasized that such a clause is broader than needed to protect the company's interest and creates a probability of harm to the public, in part because it restricts employees who are not parties to the contract and received no consideration .
Do not rely on a no-hire or no-poach clause buried in a Pennsylvania commercial services contract. After Beemac, such clauses are vulnerable as unreasonable restraints of trade, so protect legitimate interests through narrowly drawn confidentiality and direct restrictive covenants supported by consideration instead.
Sources for this answer
Case law · 2021-04-29
J.1 Pittsburgh Logistics Systems, Inc. v. Beemac Trucking, LLCBeemac supports that a business-to-business no-hire provision is unreasonably in restraint of trade and therefore unenforceable.
Balancing PLS’s interest against the overbreadth of the no-hire provision and the likelihood of harm to the public, we conclude that the no-hire provision is unreasonably in restraint of trade and therefore unenforceable.
See Pittsburgh Logistics Systems, Inc. v. Beemac Trucking, LLC, 249 A.3d 918 (Pa. 2021).
Case law · 2021-04-29
J.2 Pittsburgh Logistics Systems, Inc. v. Beemac Trucking, LLCBeemac supports that the no-hire provision was greater than needed to protect the company's interest and created a probability of harm to the public.
However, the no-hire provision is both greater than needed to protect PLS’s interest and creates a probability of harm to the public.
See Pittsburgh Logistics Systems, Inc. v. Beemac Trucking, LLC, 249 A.3d 918 (Pa. 2021).
Can a buyer enforce a non-compete assigned in an asset sale?
Not automatically. A Pennsylvania restrictive covenant is personal to the original employer and is not assignable to a buyer in an asset sale unless the employment agreement contains a specific assignability provision.
In Hess v. Gebhard & Co., the Pennsylvania Supreme Court held that a non-compete in an employment agreement is not assignable to the purchasing entity in a sale of assets absent a specific assignability provision . The covenant is tied to the employer with whom the employee made the agreement, reflecting its personal nature .
Do not assume a Pennsylvania non-compete travels with the business in an asset sale. If a buyer needs to enforce existing covenants, confirm each agreement contains an express assignability provision, because Hess bars automatic assignment without one.
Sources for this answer
Case law · 2002-10-16
K.1 Hess v. Gebhard & Co.Hess supports that a restrictive covenant in an employment agreement is not assignable to a purchasing entity in a sale of assets absent a specific assignability provision.
Therefore, we hold that a restrictive covenant not to compete, contained in an employment agreement, is not assignable to the purchasing business entity, in the absence of a specific assignability provision, where the covenant is included in a sale of assets.
See Hess v. Gebhard & Co. Inc., 808 A.2d 912 (Pa. 2002).
Case law · 2002-10-16
K.2 Hess v. Gebhard & Co.Hess supports that an employee's restrictive covenant is confined to the employer with whom the agreement was made, absent specific provisions for assignability.
Like the contract for hire, upon which the covenant was given, the employee’s restrictive covenant is confined to the employer with whom the agreement was made, absent specific provisions for assignability.
See Hess v. Gebhard & Co. Inc., 808 A.2d 912 (Pa. 2002).
What Pennsylvania non-compete reform efforts should employers watch?
No general statewide ban is law in Pennsylvania. The only enacted statutory restriction is Act 74's health care carve-out; broader change exists only as pending bills that have not become law.
As of this review, Pennsylvania has not enacted a general non-compete ban. Two narrower bills in the 2025-2026 session are worth tracking: Senate Bill 142, which would prohibit enforcement of non-compete covenants in broadcast employment agreements and which the Senate Labor and Industry Committee reported out to first consideration on June 2, 2026, and Senate Bill 680, which would extend Act 74's health care protections to therapists and remains in the Senate Health and Human Services Committee. Neither has passed either chamber or been enacted.
Because the enacted baseline remains common-law reasonableness plus the Act 74 health care carve-out, these bills matter as a signal of direction, not as current law.
Treat Senate Bill 142 and Senate Bill 680 as monitoring items, not present Pennsylvania law, and do not assume any general statewide non-compete ban has passed. Recheck the General Assembly's bill status before changing forms, because only Act 74's health care restriction is currently enacted.
Sources for this answer
Primary law
L.1 Fair Contracting for Health Care Practitioners Act § 4(a)Act 74 is the enacted Pennsylvania statute restricting non-competes, voiding covered health care covenants entered after its effective date except as provided.
(a) Applicability.--Except as provided under subsection (b), a noncompete covenant entered into after the effective date of this subsection is deemed contrary to the public policy and is void and unenforceable by an employer.
See Fair Contracting for Health Care Practitioners Act, Act of July 17, 2024, P.L. 846, No. 74, § 4(a) (Pa.).