Does a Position Change Nullify a Non-Compete Clause

My question involves labor and employment law for the state of: PA

I signed a non-compete that is pretty clear - for a period of 2 years upon separation from current company, I will not work for "any customers, clients, partners, direct competitors, vendors, 3rd party providers, or sub contractors" who are or have been customers of current company.

Two months ago I was promoted to a new position. I signed the non-compete as a territory manager (sales) and have been promoted to a non-sales position. In addition, I received increased pay from what was stipulated in my initial contract and non-compete. Having now been in this new position for over two months, I have yet to be presented with a new job description or contract to sign. Can I argue that since my position changed and I was not presented with a new contract or non-compete, the the original is void? Any other suggestions for a defense? Does an inability to seek gainful employment in a specific industry, which one has the bulk of his professional experience in, grounds for nullifying a non-compete?

I don't see why it would be void. The agreement is between you and the employer and that hasn't changed.

What do you suppose "upon separation from the company" means?

But to answer your question, no, your inability to work in a specific way is not grounds for nullification. That's what restrictive clauses do - they restrict. As long as it is reasonable in its geographic boundaries and length of time, and as long as it protects a legitimate company interest, then it is enforceable. You knew of the restrictions when you voluntarily chose to accept the agreement's terms.

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Quoting Bubba Jimmy

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You knew of the restrictions when you voluntarily chose to accept the agreement's terms.

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That's true. What I did not know was that the company was mismanaged and struggling to make any money. Which is why I want to jump ship. But if I quit, I can't get unemployment. And the only way I can get gainful employment immediately is to work for a competitor.

So let's talk repercussions. What is typical in PA for something like this. They will sue me, how is the amount determined? It will probably be more beneficial to breach the contract and settle while going to work for a much higher paying competitor.

Read this: http://www.mbbp.com/resources/employment/noncomps.html

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Quoting flyingron

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Read this: http://www.mbbp.com/resources/employment/noncomps.html

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Appreciate this. Now I have even more questions. The doc you linked states that several courts in MA have held that if an employee changes positions a new non-compete is required. I will try finding some case law for PA. The doc also states that a judge will look at how non-competes are enforced from a company standpoint and that the employer must not be selective in how they are enforced. This might be my leg to stand on. There is evidence in at least 2 other cases this year along where other employees with the same non-compete violated it and were not sued.

MA is funny about non-competes. Just because you find something in MA requiring a new non-compete when you change positions, doesn't mean PA is going to be the same way. MA doesn't necessarily follow the trend in a lot of ways.

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Quoting cbg

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MA is funny about non-competes. Just because you find something in MA requiring a new non-compete when you change positions, doesn't mean PA is going to be the same way. MA doesn't necessarily follow the trend in a lot of ways.

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Understood cbg and agreed. Regardless, I can't find squat indicating the same type of provision or consideration in any PA case law. Puts me in a pretty tough spot.

Insulation Corp. v. Brobston, 667 A.2d 729 (Pa. Super. Ct. 1995), is the case that established in PA that in order to be enforceable, non-competition covenants must "relate to a contract for employment, be supported by adequate consideration and be reasonably limited in both time and territory." Particularly, the enforcement of post-employment restraints is permitted "only where they are ancillary to an employment relationship between the parties, the restrictions are reasonably necessary to protect the employer, and the restrictions are reasonably limited in duration and geographic extent."

There are many cases that go one way or the other depending on the specific facts. For example, if the restrictive covenant is introduced after employment begins the court typically throws it out. In one case the company got all its business through open competitive bidding on government contracts, so there was no question of any "trade secret" customer data. but it is entirely fact-specific. Each of these cases that is litigated is VERY expensive. And, when a company sends the demand letter to the new employer the typical response of the new employer is to terminate the employment rather than deal with a conflict they don't want or need.

So I would be very cautious before I decided to roll the dice and violate a restrictive covenant unless I had a case that nearly EXACTLY matched my facts. They do go either way, and not always predictably. However, it is clear from several cases I reviewed that the offer of the job, predicated on the execution of the restrictive covenant agreement, is adequate consideration in PA.

Thanks Bubba for that info. What about the fact that there is no consistency on how (and the language used) in non-competes within my company? For example, I signed my non-compete as a territory sales manager. There are 5 others in my division, who do not have non-competes in place and were never asked to sign one. In addition, another one of our employees quit so that he could go work directly for one of our clients. That is in direct violate of the non-compete, however, the company choose not to pursue that as they thought this new employment arrangement would somehow benefit them. The fact that I have a non-compete in place and others with my position, in my division, do not, is selective by definition, is it not? Wouldn't that be a way to show that the company does not uniformly enforce non-competes?