Is a non-compete agreement signed months after work begins enforceable?

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I was reading a blog post from Jennifer L. Gokenbach at the Colorado Employer’s Law Blog, discussing how, as of yesterday, Colorado deems continuation of at-will employment to be sufficient consideration to support a non-competition agreement. In non-lawyer speak, that means that if an employee signs an agreement not-to-compete in Colorado after the employee starts working, on the condition that if the employee does not sign the agreement then the employee will be fired, the employer may later enforce that agreement.

That’s now the law in Colorado. Is that also the law in PA, NJ, and DE?

Delaware: Yes. Research & Trading Corp. v. Powell, 468 A.2d 1301, 1305 (Del.Ch.1983).

New Jersey: Yes. Hogan v. Bergen Brunswiq Corporation, 153 N.J.Super. 37, 378 A.2d 1164 (App.Div. 1977).

Pennsylvania: No. An agreement not to compete with a former employer must be supported by new consideration; i.e., a change in the conditions of employment (e.g., a raise, promotion, or other financial benefit). Maintenance Specialties, Inc. v. Gottus, 455 Pa. 327, 314 A.2d 279, 280 (Pa. 1974).

Updated:
  • Lala

    For Pennsylvania, if a non-compete agreement is presented a full year after a company was bought out by a new company, is it enforceable? I signed an agreement in my employee handbook when I was hired 3 years ago stating that all work performed for my employer was property of the employer. My company was bought out over a year ago and I still work here.  I was recently asked to sign a non-compete agreement. There has been no financial benefit on my part. In fact, nothing about the company’s daily operations has changed at all (no change in benefits, employee code of conduct, official title, etc).

    • Thank you for the question. Unfortunately, I cannot offer legal advice on this blog tailored to a particular person or set of facts. You are welcome to call me, subject to the blog disclaimer, to discuss further.
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