The Pennsylvania Superior Court recently rejected an uncommon type of non-hire clause between two competing trucking companies. The non-hire clause invalidated in Superior Court was an agreement between Pittsburgh-area firms, Pittsburgh Logistics Systems (PLS), Inc. and BeeMac Trucking, LLC, to not to hire each other’s employees.
This type of clause is different from traditional non-compete clauses that prevent employees from working for an employer’s competitors after they leave their job. According to the decision, there is currently no case law in Pennsylvania regarding no-hire agreements between contracting companies.
Understanding Non-Hire Clauses
Where non-compete clauses cause the employee not to work with an employer’s competitors, the non-hire clause puts the burden of employment on the business owners. Both trucking companies agreed not to hire or solicit any employee of the other during the term of the contract and for up to two years after its termination. The non-hire agreement also restricted either company’s agents or independent contractors from hiring each other’s workers.
The Pennsylvania Superior Court offered several reasons for voiding the non-hire clause, including:
- Employees of both companies are unwittingly put under restrictions they never agreed to.
- Employees of both companies receive no consideration or input about being included in the non-hire clause.
- The non-hire clause exceeds the necessary protection the companies need to protect their business interests.
The court adds that no such provision between companies has ever been upheld in Pennsylvania or likely has ever been the subject of litigation. The case was initiated when three PLS employees left and joined BeeMac in 2016.
Non-Compete Clause Explained
Some employers ask new hires to sign non-compete agreements that become effective when the worker is terminated or leaves at their own will.
In the eyes of the law, non-competes are only legal if they:
- Are supported by consideration at the time of signing
- Protect a valid business interest of the employer
- Are reasonable in geography, time, and scope
Valid consideration means the employee must receive something of value, beyond the job alone, in return for the promise of the agreement. This could be a promotion or another incentive or benefit not part of the standard employment agreement. Non-compete agreements tread a fine legal line. They are designed to prevent workers from sharing trade secrets, but at the same time, they cannot interfere with a worker’s ability to earn a living.
Allegheny County Employment Law Lawyers at AlpernSchubert P.C. Protect Pennsylvania Workers from Unfair Restrictions
Your employment contract may contain restrictions that have ramifications on your current and future employment options. It is smart to consult an Allegheny County employment law lawyer at AlpernSchubert P.C. to review your employment contract. Our team offers complete employment litigation services for situations involving workplace discrimination, non-compete agreements, disability, layoffs, and wage disputes. To schedule a free case evaluation, call us today at 412-765-1888 or contact us online. We are conveniently located in Pittsburgh, and we proudly serve clients throughout Pennsylvania.