Non-Compete & Non-Solicitation Covenants

Non-compete agreements are enforceable in Pennsylvania, but courts apply them with skepticism. A non-compete that is too broad will be reformed, or thrown out entirely. You need to know the rules whether you are the employer drafting the agreement or the employee being asked to sign one.

Pennsylvania Non-Compete Standards

To be enforceable, a non-compete must satisfy three requirements:

• Reasonable in duration: Courts rarely enforce non-competes longer than 2 years. One year is the sweet spot: anything over 2 years faces heavy scrutiny.
• Reasonable in geographic scope: Must be limited to the area where the employer actually does business. A nationwide non-compete for a company that only operates in eastern PA will likely be narrowed.
• Reasonable in scope of restricted activity: Must be limited to work that actually competes with the former employer. A covenant that bars someone from an entire line of work, beyond what the employer needs to protect, is likely to be narrowed or not enforced.

Consideration Requirement

This is where many non-competes fail. If the non-compete is signed at the time of initial hiring, the job itself is adequate consideration. But if you are asked to sign a non-compete after you have already been employed, Pennsylvania requires new, independent consideration; continued employment alone is not sufficient. Something of tangible value must be exchanged: a raise, a promotion, a bonus, or access to new training. Without it, the non-compete is unenforceable.

Non-Solicitation Agreements

Non-solicitation clauses, which prevent you from soliciting former clients or recruiting former co-workers, are analyzed under the same reasonableness framework but are easier to enforce because they are less restrictive than a full non-compete. Many employers should consider non-solicitation agreements as an alternative to non-competes: they protect the business's key relationships without preventing an employee from earning a living.

Trade Secrets & Confidential Information

Pennsylvania adopted the Uniform Trade Secrets Act (12 Pa.C.S. § 5301 et seq.). Trade secret misappropriation claims can be brought even without a non-compete agreement. Customer lists, pricing data, proprietary processes, and formulas can qualify as trade secrets if the employer takes reasonable steps to keep them confidential.

Healthcare Practitioners: Special Restrictions Under Act 74 of 2024

Effective January 1, 2025, the Fair Contracting for Health Care Practitioners Act (Act 74 of 2024, Act of July 17, 2024, P.L. 846, No. 74) imposes significant new restrictions on non-compete agreements for healthcare practitioners in Pennsylvania:

• Enforceable up to one year after a voluntary departure. A non-compete between a health care employer and a covered practitioner is enforceable where the practitioner voluntarily leaves and the restriction runs for no more than one year. A covered non-compete that runs longer than one year is void and unenforceable, regardless of what the contract says. The Act has a separate rule for practitioners who hold an ownership interest in the practice: it is not to be read to void their non-compete as a direct result of a sale of that interest or of the practice, a change of control, or the practitioner receiving an ownership interest, unless the practitioner is not a party to that deal.
• Void on employer termination. If the employer terminates the practitioner (as opposed to the practitioner voluntarily leaving), a covered non-compete becomes void and unenforceable, subject to the same ownership-interest exception described above.
• Patient notification required, for a defined group of patients. Within 90 days after a covered practitioner's departure, the employer must notify the patients that practitioner saw in the past year who also had an ongoing outpatient relationship with that practitioner of two or more years. The notice must disclose the departure and explain how the patient can transfer records to a different practitioner, which can include the departed one.

These protections apply to a defined group of practitioners: physicians (MDs and DOs), certified registered nurse anesthetists, certified registered nurse practitioners, and physician assistants. The Act does not cover dentists, general nurses, or psychologists. If you are a healthcare employer using non-competes or a practitioner subject to one, this law substantially changes the analysis.

Act 74 applies prospectively only. Under Section 7's effective date and Section 4(a)'s "entered into after the effective date" language, the one-year cap and the void-on-termination rule govern only non-competes entered into after the Act took effect on January 1, 2025. If your healthcare non-compete predates that, the Act does not apply to it, and it does not become void or automatically capped at one year. An older agreement is still evaluated under the general Pennsylvania reasonableness standards described above.

Practical Advice

For employers: Keep your non-competes narrow and specific. A tightly drawn 1-year, geographically limited non-compete with adequate consideration is far more enforceable than an aggressive 3-year nationwide restriction. Courts have the power to "blue pencil" (narrow) an overbroad restriction, but they may also refuse to enforce it entirely.

For employees: Do not assume a non-compete is enforceable just because you signed it. If you are considering a job change and have a non-compete, get a legal opinion before resigning. The analysis is fact-specific, and many non-competes have fatal defects, particularly the consideration issue for existing employees.

Legal and factual content on this page was last verified: Sep. 2026. If you are reading this significantly after that date, confirm key provisions with current statute text or contact our office.