Pennsylvania Non-Compete Agreement
Pennsylvania enforces employee non-compete agreements only if reasonable. Continued employment alone is not enough consideration. Attorney review available.
Introduction
A non-compete agreement binds an employee not to compete with a business for a set time and area after the job ends, and Pennsylvania is unusual in having no general non-compete statute, leaving the question to a common-law test built by its courts. Pennsylvania enforces employee non-competes, but only when they are reasonable. There is no single Pennsylvania statute that governs non-competes for ordinary employees; instead, Pennsylvania courts apply a common-law test. To hold up, a covenant must be incident to the employment relationship, supported by adequate consideration, reasonably limited in duration and geographic extent, and designed to protect a legitimate business interest of the employer, such as trade secrets, confidential information, or customer goodwill (Hess v. Gebhard & Co.; Sidco Paper Co. v. Aaron). Pennsylvania is strict about consideration: if the non-compete is signed at the start of a job, the job itself is usually enough, but for an employee who is already working, continued employment alone is not sufficient, and the Pennsylvania Supreme Court held in Socko that a Uniform Written Obligations Act recital of intent to be legally bound does not fill that gap. Pennsylvania courts also blue-pencil, meaning they may narrow an overbroad clause rather than void it. A 2024 law, the Fair Contracting for Health Care Practitioners Act, sharply limits non-competes for doctors and certain other clinicians. Pennsylvania has no salary threshold. This page explains Pennsylvania's rule and offers a template scoped to those limits. It is a state-law overview, not a promise that any given clause will hold up.
Key Things to Know
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A non-compete agreement is a contract in which one party, usually an employee, agrees not to compete with a business for a set time and area after the relationship ends. In Pennsylvania an employee non-compete is enforceable if it is reasonable.
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Pennsylvania has no general non-compete statute. Courts decide enforceability under a common-law test: the covenant must be incident to the employment, supported by adequate consideration, reasonably limited in duration and geography, and designed to protect a legitimate business interest of the employer (Hess v. Gebhard & Co., 570 Pa. 148, 808 A.2d 912 (2002); Sidco Paper Co. v. Aaron, 465 Pa. 586, 351 A.2d 250 (1976)).
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Pennsylvania has no general salary or income threshold that turns a non-compete on or off. Enforceability turns on the reasonableness test, not on how much the employee earns, so do not treat any dollar figure as a live threshold or import another state's number.
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To be reasonable, a Pennsylvania non-compete must protect a legitimate business interest, such as trade secrets or customer relationships, not simply block competition, and its duration and geography must be no broader than necessary. Courts in Pennsylvania have generally been more willing to uphold restrictions of about one to two years tied to where the employer actually competes, but there is no fixed cap.
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Pennsylvania is strict on consideration. Signing at the start of a job is usually enough, but for an existing employee continued employment alone is not sufficient consideration; the employer must give something new, such as a raise, bonus, or promotion. In Socko v. Mid-Atlantic Systems of CPA, Inc., 633 Pa. 555, 126 A.3d 1266 (2015), the court held that a Uniform Written Obligations Act statement of intent to be legally bound does not substitute for consideration.
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Pennsylvania courts apply blue-penciling: an overbroad covenant can be narrowed to a reasonable time, area, and scope rather than voided entirely (Sidco Paper Co. v. Aaron; WellSpan Health v. Bayliss, 869 A.2d 990 (Pa. Super. 2005)). Health care practitioners get special protection under the Fair Contracting for Health Care Practitioners Act (Act 74 of 2024, effective January 1, 2025).
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Because a non-compete may be narrowed or not enforced, Pennsylvania employers often protect confidential information through a confidentiality or non-disclosure agreement and the Pennsylvania Uniform Trade Secrets Act (12 Pa.C.S. Section 5301 et seq.) rather than relying only on a non-compete.
Key decisions before you file
Before you file a Non-Compete Agreement in Pennsylvania, a few decisions shape the document: which option to choose and what each one means. The Non-Compete Agreement guide walks through them.
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Pennsylvania Requirements for Non-Compete Agreement
In Pennsylvania an employee non-compete is enforceable if it is reasonable. There is no general non-compete statute, so courts decide enforceability under a common-law test: the covenant must be incident to the employment, supported by adequate consideration, reasonably limited in duration and geographic extent, and designed to protect a legitimate business interest of the employer (Hess v. Gebhard & Co., 570 Pa. 148, 808 A.2d 912 (2002); Sidco Paper Co. v. Aaron, 465 Pa. 586, 351 A.2d 250 (1976)). A clause that is too broad or aimed only at blocking competition can be held unenforceable.
Pennsylvania has no general enacted salary or income threshold that decides whether a non-compete is enforceable. Enforceability turns on the common-law reasonableness test, not on how much the employee earns. The only pay-independent occupation limit is the Fair Contracting for Health Care Practitioners Act for covered clinicians, which is an occupation rule, not a salary floor. Do not rely on any other state's salary figure when the worker is in Pennsylvania.
Pennsylvania is strict on consideration. Signing a non-compete when a job starts is usually enough, but for an existing employee continued employment alone is not sufficient; the employer must give new, valuable consideration such as a raise, bonus, promotion, or a beneficial change in job status. In Socko v. Mid-Atlantic Systems of CPA, Inc., 633 Pa. 555, 126 A.3d 1266 (2015), the Pennsylvania Supreme Court held that a Uniform Written Obligations Act recital of intent to be legally bound does not substitute for actual consideration.
A Pennsylvania non-compete must protect a legitimate business interest, such as trade secrets, confidential information, customer goodwill, or specialized training, and keep its duration and geography no broader than necessary. Courts in Pennsylvania have generally been more willing to uphold restrictions of about one to two years tied to the area where the employer actually competes, but there is no fixed cap for ordinary employees and each clause is judged on its facts.
Pennsylvania applies blue-penciling. A court may narrow an overbroad covenant's duration, geography, or scope to what is reasonable and enforce the rest, rather than voiding it entirely (Sidco Paper Co. v. Aaron, 465 Pa. 586, 351 A.2d 250 (1976); WellSpan Health v. Bayliss, 869 A.2d 990 (Pa. Super. 2005)). Courts narrow or strike unreasonable, severable terms but will not rewrite the agreement wholesale, so drafting narrowly from the start is safer than relying on a court to fix it.
Pennsylvania's Fair Contracting for Health Care Practitioners Act (Act 74 of 2024, enacted from HB 1633, effective January 1, 2025) prohibits enforcing certain non-compete covenants against covered health care practitioners, including physicians, doctors of osteopathy, certified registered nurse anesthetists, certified registered nurse practitioners, and physician assistants. As reported by counsel guidance, such a covenant is enforceable only if it runs one year or less and the practitioner left voluntarily, and is unenforceable if the employer dismissed the practitioner. Re-confirm the section-level text before relying on a clinician non-compete.
Pennsylvania has no general statute requiring advance notice or a waiting period before an ordinary employee signs a non-compete. The load-bearing requirement is adequate consideration, not notice: an existing employee must receive a new benefit for the covenant to be supported. Employers often present the covenant together with the offer, raise, or promotion that supplies that consideration, and keep the time and geographic limits reasonable so the clause survives review.
Because an overbroad non-compete may be narrowed or not enforced, Pennsylvania employers often protect confidential information with a confidentiality or non-disclosure agreement and the Pennsylvania Uniform Trade Secrets Act (12 Pa.C.S. Section 5301 et seq.). This protects trade secrets and customer data without a broad restraint on where a former employee may work, and is often more durable than a non-compete. The 2024 Federal Trade Commission non-compete rule was set aside by a court before it took effect and is not currently binding, so Pennsylvania law controls.
Frequently Asked Questions
Yes, if they are reasonable. Pennsylvania has no general non-compete statute, so courts apply a common-law test: the covenant must be incident to the employment relationship, supported by adequate consideration, reasonably limited in duration and geographic extent, and designed to protect a legitimate business interest of the employer (Hess v. Gebhard & Co.; Sidco Paper Co. v. Aaron). The interest must be real, such as trade secrets or customer goodwill, and the restraint no broader than necessary. A clause that is too long, too broad, or aimed only at blocking competition can be held unenforceable in Pennsylvania.
There is no fixed maximum in Pennsylvania. Duration is judged as part of the reasonableness test, and courts in Pennsylvania have generally been more willing to uphold restrictions of about one to two years when the rest of the clause is reasonable and tied to a legitimate business interest. Longer terms face more scrutiny. If a duration is unreasonable, a Pennsylvania court may narrow it rather than strike the whole covenant, but drafting a reasonable term from the start is safer. Health care practitioner non-competes are separately capped by the 2024 Fair Contracting for Health Care Practitioners Act.
Pennsylvania courts weigh several things together: whether the covenant is incident to the employment, whether it is supported by adequate consideration, whether its duration and geographic reach are no broader than needed, and whether it protects a legitimate business interest of the employer. A reasonable Pennsylvania non-compete guards a genuine interest, such as trade secrets, confidential information, or established customer relationships, and limits its time and geography to what is truly needed to protect that interest rather than to stop ordinary competition. Restraints aimed only at preventing a former employee from working are not legitimate interests.
No. Pennsylvania has no general enacted wage or income threshold that decides whether an employee non-compete is enforceable, unlike some states that only permit them above a salary floor. Enforceability in Pennsylvania turns on the common-law reasonableness test, not on how much the employee earns. One occupation-based exception exists: the 2024 Fair Contracting for Health Care Practitioners Act limits non-competes for covered clinicians regardless of pay, but that is an occupation rule, not a salary threshold, so no dollar figure applies in Pennsylvania today.
Pennsylvania is strict here. If the non-compete is signed when the job starts, the job itself is usually sufficient consideration. But if an employee is already working, continued employment alone is not enough; the employer must give new, valuable consideration such as a raise, bonus, promotion, or a beneficial change in job status. In Socko v. Mid-Atlantic Systems of CPA, Inc., 633 Pa. 555, 126 A.3d 1266 (2015), the Pennsylvania Supreme Court held that a Uniform Written Obligations Act recital that the parties intend to be legally bound does not substitute for actual consideration in a restrictive covenant.
Only within tight limits. Pennsylvania's Fair Contracting for Health Care Practitioners Act (Act 74 of 2024, effective January 1, 2025) prohibits enforcing certain non-compete covenants against covered health care practitioners, which include physicians, doctors of osteopathy, certified registered nurse anesthetists, certified registered nurse practitioners, and physician assistants. As reported by counsel guidance, such a covenant is enforceable only if it runs one year or less and the practitioner left voluntarily, and it is unenforceable if the employer dismissed the practitioner. Employers must also notify certain patients when a practitioner departs. Confirm the current statutory text before relying on a clinician non-compete in Pennsylvania.
Often yes. Pennsylvania applies blue-penciling. Instead of voiding an overbroad covenant entirely, a Pennsylvania court may narrow its duration, geographic area, or scope to what is reasonable and enforce the rest (Sidco Paper Co. v. Aaron; WellSpan Health v. Bayliss, 869 A.2d 990 (Pa. Super. 2005)). Courts narrow or strike unreasonable, severable terms but will not rewrite the agreement wholesale. Even so, an employer is better served drafting a narrow, reasonable clause than relying on a judge to fix an overbroad one.
No. In 2024 the Federal Trade Commission issued a rule that would have banned most non-competes nationwide, but a federal court set it aside before it took effect, so it is not currently in force and its status has remained unsettled. Either way, Pennsylvania's own common-law reasonableness rule, and for clinicians the 2024 Fair Contracting for Health Care Practitioners Act, continue to govern non-competes in Pennsylvania regardless of the federal rule's fate.