Friday, October 12, 2012

Pennsylvania, Based On the Uniform Written Obligations Statute, Approves Non-Competes


Pennsylvania appears to be the only state that has adopted the Uniform Written Obligations Act (33 Pa. Cons. Stat. Ann. § 6 (West)), which provides as follows: “A written release or promise hereafter made and signed by the person releasing or promising, shall not be invalid or unenforceable for lack of consideration, if the writing also contains an additional express statement, in any form of language, that the signer intends to be legally bound.”

Based on that statutory language, Judge Lancaster of the Federal District Court for the Western District of Pennsylvania held in Latuszewski v. Valic Fin. Advisors, 2007 U.S. Dist. LEXIS 93329, 2007 WL 4462739 (W.D. Pa. Dec. 19, 2007) that for a non-compete covenant entered into subsequent to the commencement of the employment relationship, the statement of intent of the parties to be legally bound acts as a valid substitute for consideration where the agreement stated that the employee “agree[s] to be legally bound to all the terms and conditions in the Registered Representative Agreement.”

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Tom Ferguson said...

NOT anymore. See Socko v. Mid-Atlantic Systems of CPA, Inc., 1223 MDA 2013 (Pa. Super. May 13, 2014)

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