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
Socko
A Mere Peppercorn Can Constitute Consideration? Not always.
By Zachary C. Jackson on
Posted in Non-Compete Agreements
Most lawyers learn during their first year in law school that courts won’t inquire into the adequacy of consideration for a contract and that, as a result, a “mere peppercorn” can constitute consideration. It’s important to remember, though, that in many states, restrictive covenants are an exception to that rule.
Continue Reading A Mere Peppercorn Can Constitute Consideration? Not always.