Although post-employment restrictive covenants (“Non-Compete Agreements”) are not per se unenforceable, they are not favored in Pennsylvania and have been historically viewed as a trade restraint that prevents a former employee from earning a living. Non-Compete Agreements are enforceable under Pennsylvania law if: (1) the restrictive covenant is incident to an employment relationship between the parties; (2) the restrictions imposed by the covenant are reasonably necessary for the protection of the employer; and (3) the restrictions imposed are reasonably limited in duration and geographic scope. Furthermore, Pennsylvania law permits equitable enforcement of Non-Compete Agreements only so far as reasonably necessary for the protection of the employer’s protectable business interests.
In testing the validity of a restrictive covenant in Pennsylvania, a court must apply a balancing test where the court balances the employer’s protectable business interest against the interest of an employee in earning a living, and then balance the result against the interests of the public. With respect to physician contracts, the concern of the courts for the public welfare results in a close judicial scrutiny of restraints on physicians because of the value of their services to the community. Where the Non-Compete Agreement seeks to limit the professional practice of a physician, the court must scrutinize the effect of the resulting loss of medical services on the public interest before entering an injunction to enforce the restrictive covenant. When patient demand in the geographical region in question exceeds the ability of appropriately trained physicians to provide expeditious treatment, then the public interest predominates over the right of employer to enforce a Non-Compete Agreement against physician employees by injunction. See Wellspan Health v. Bayliss, 869 A.2d 990 (Pa. Super. 2005)
Philadelphia Physician Contract Lawyers at Sidkoff, Pincus & Green Represent Physicians in Negotiating Physician Agreements and in Litigation
At Sidkoff, Pincus & Green, our experienced team of Philadelphia business litigation lawyers handle all types of legal matters, including claims involving physicians, medical practices and restrictive covenants. If you need assistance with any of these types of matters, contact us at 215-574-0600 or fill out ouronline contact form today.
Although post-employment restrictive covenants (“Non-Compete Agreements”) are not per se unenforceable, they are not favored in Pennsylvania and have been historically viewed as a trade restraint that prevents a former employee from earning a living.