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Pennsylvania Supreme Court Strikes Down “No-Hire” Clauses Between Businesses

May 4th, 2021
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The Pennsylvania Supreme Court handed down a ruling Monday that could have significant impact on how business is conducted in the Keystone State. In deciding Pittsburgh Systems, Inc. v. Beemac Trucking, et. al., the commonwealth’s highest court declared attempts by companies to deter hiring away of employees as part of business contracts were illegal. The case stemmed from the plaintiff, Pittsburgh Logistics Services, Inc. (PLS), a shipping logistics firm, and their contract with the defendant Beemac Trucking (Beemac), a trucking company moving freight. The terms of 2010 deal included non-solicitation and no-hire provisions between the two companies, which lasted two years longer than the duration of the original one-year term. However, while contracted, Beemac hired four employees away from PLS.

The Court acknowledged PLS had an interest in retaining the employees they hired and trained. However, the terms of the no-hire clauses were potential public harm and beyond what was needed to protect the original employer. The agreement did not differ for employees who were or were not directly involved with the Beemac deal, which the Court deemed too broad. The deal also stifled free trade in the industry, which creates an additional public harm. Perhaps most importantly, none of the employees signed onto the deal, which is required for the enforceable restrictive covenant to take effect, as per state law.

Employment law is a complicated field, even when companies dutifully follow the law. Those trying to work through any sort of disagreement with their employers can feel overwhelmed and underprepared. It helps to have an experienced ally on your side. The employment law attorneys at The Gold Law Firm P.C. have dealt with a variety of cases and can assist you to reach your legal goals. Call today at 215-569-1999 or contact us online for a free consultation. Based in Philadelphia, we are proud to serve the hard-working citizens of Wilkes-Barre, Scranton, Northeast Philadelphia, Bucks County, Chester County, Delaware County, Montgomery County, and Cherry Hill, South Jersey.

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