Most jurisdictions in the United States hold that continued employment constitutes sufficient consideration in exchange for entering into a non-competition agreement. A handful of jurisdictions however Minnesota, North Carolina, Texas, Washington, West Virginia and (in some cases) Illinois require employers to provide additional consideration to an employee in order for the non-competition agreement to be enforceable. Add Pennsylvania to this list.
In a case of first impression, a Pennsylvania appellate court, in Socko v. Midatlantic Systems of CPA, Inc., affirmed a trial court order finding a non-competition agreement entered into after the commencement of employment unenforceable unless supported by new consideration. In other words, continued employment alone is not sufficient consideration for a restrictive covenant to be held enforceable under Pennsylvania law.
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