Key Takeaways:
- Pennsylvania has no blanket ban on employee non-competes. Courts may enforce a “restrictive covenant” when it is tied to employment, protects a legitimate business interest, and is reasonable in duration and geographic scope.
- A covenant signed after employment begins generally requires new consideration; continued employment alone is not enough.
- The FTC’s nationwide Non-Compete Rule is not in effect, but targeted federal enforcement continues.
- Pennsylvania has separate statutory limits for certain health care practitioners.
For employers and employees evaluating a 2026 non-compete agreement in Pennsylvania, enforceability depends on the agreement’s purpose, timing, scope, and industry. Pennsylvania courts scrutinize these restraints because they can limit a worker’s ability to earn a living, but properly tailored covenants may still be enforced.
Are Non-Competes Enforceable in Pennsylvania?
Yes, in some circumstances. Pennsylvania courts recognize non-competes connected to employment when the restriction is reasonably necessary to protect the employer and reasonably limited in time and geography. Legitimate interests can include trade secrets, confidential information, customer goodwill, and specialized training.
What Makes a Restrictive Covenant Reasonable?
An employer’s “restrictive covenant” in Pennsylvania should never be any broader than the interest it protects. Courts consider factors such as the restriction’s duration and geographic reach, the employee’s duties, access to confidential information, customer relationships, and whether the covenant protects a legitimate business interest rather than ordinary competition. Employers should always connect their restriction to the employee’s role, market, customer relationships, and access to confidential material.
How Recent Federal and State Shifts Affect Employers
The federal landscape changed after the FTC issued a nationwide Non-Compete Rule in 2024. That rule is not in effect or enforceable, and the FTC moved in 2025 to dismiss its appeals after a federal court vacated it.
Still, the agency continues targeted non-compete enforcement: In June 2026, the FTC finalized a consent order requiring Rollins Inc. to stop enforcing covered non-competes against more than 18,000 employees.
Pennsylvania also enacted the Fair Contracting for Health Care Practitioners Act, effective January 1, 2025. For covered doctors, certified registered nurse anesthetists, certified registered nurse practitioners, and physician assistants, a new non-compete is generally void unless it lasts no more than one year and the practitioner was not dismissed by the employer.
These developments make PA non-compete laws in 2026 a matter of state contract rules, industry-specific restrictions, and federal competition enforcement.
Drafting Covenants That Hold Up in Court
Employers should draft narrowly. Define the business interest being protected, choose a duration and territory tied to that interest, and avoid restrictions covering work, markets, or activities unrelated to the employee’s role. Any drafted agreements should also be presented at the correct time and supported by sufficient consideration. Older forms should be reviewed periodically because workforce roles, business territories, and governing law can change.
Frequently Asked Questions (FAQs):
Are non-competes enforceable in PA in 2026?
They can be. Enforceability depends on the employment relationship, consideration, legitimate business interests, and whether the limits are reasonable in duration and geography.
Can an employer add a non-compete after hiring?
Yes, but Pennsylvania courts generally require new consideration when a restrictive covenant is signed after employment has begun.
Did the FTC ban all non-competes?
No. The FTC’s nationwide rule is not in effect. The agency can still challenge specific agreements through individual enforcement actions.
Do Pennsylvania health care workers have different rules?
Some do. The Fair Contracting for Health Care Practitioners Act places special limits on non-competes for specified health care practitioners.
Have Questions About a Non-Compete Agreement Matter in PA? Our Seasoned Philadelphia Business Lawyers at The Gold Law Firm P.C. Can Explain Your Legal Options
If you need to discuss your company’s non-compete agreement to see if it complies with the law, or if you want to possibly challenge your employer’s non-compete, our Philadelphia business lawyers at The Gold Law Firm P.C. can explain your legal options. For a free consultation, call today at 215-569-1999 or fill out our online contact form. With office locations in Philadelphia and Malvern, Pennsylvania, Pennsauken, New Jersey, and New York, New York, we proudly serve clients in the surrounding areas. *NYC, Pennsauken, and Malvern offices are by appointment only.
