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Weighing in on an issue that is drawing attention nationwide, the Pennsylvania Supreme Court recently held, in Socko v. Mid-Atlantic Systems of CPA, Inc., that the mere continuation of employment is not sufficient consideration to support a restrictive covenant.  Rather, for there to be sufficient consideration, the Court held that the employee must receive “some corresponding benefit or a favorable change in employment status.”  As examples of such sufficient additional consideration, the Court cited “a promotion, a change from part-time to full-time employment, or even a change to a compensation package of bonuses, insurance benefits, and severance benefits.”   The…
Continue Reading Pennsylvania Supreme Court Holds That Mere Continued Employment Is Not Adequate Consideration To Support A Restrictive Covenant

Last week, in the case of Lucht’s Concrete Pumping, Inc. v. Homer, the Colorado Supreme Court held that the continued employment of an at-will employee is adequate consideration for a noncompetition agreement. The Court explained that if this was not the case, employers would have an incentive to terminate at-will employees and condition their re-hire on the execution of a noncompetition agreement.
Continue Reading Colorado Supreme Court Holds That Continued Employment Is Adequate Consideration For A Noncompetition Agreement

Last year, a bill that sought to codify Massachusetts’ non-competition law died in Committee in that state’s Legislature. A new bill on the same subject has now been introduced in the Massachusetts Legislature, and it clarifies and modifies the old bill, mostly in an attempt to satisfy businesses that found portions of the bill unacceptable. As modified, the new bill appears to have a good chance of passing this coming spring.
Continue Reading Massachusetts Legislators Refile Modified Non-Compete Legislation