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).