The recruitment and onboarding process can be fast-paced as employers and recruits go back and forth on salary, title, benefits, and more. Sometimes an impending deadline pushes the parties to move quickly, such as the start date for a big project for which the new recruit will be a key part of the team. In their anxiousness to just get started after an important recruit agrees to join the company, business leaders may be tempted to let the new hire start work while the parties “work out the details” of an employment agreement – potentially including the exact terms of restrictive covenants such as non-compete and non-solicit provisions. However, the seemingly reasonable decision to give an employee time to review a proposed agreement, and perhaps discuss it with personal counsel before signing, could leave you with an unenforceable agreement according to a recent decision by the Pennsylvania Supreme Court. The recent decision in Rullex Co., LLC v. Tel-Stream, Inc., emphasized that, in order for a restrictive covenant to be enforceable based on a job offer (and without any additional consideration), the parties must have agreed on the covenant’s provisions at the time employment commences.
Pennsylvania Supreme Court Reminds Employers To Get Employee Signatures On Covenants Before They Start Work