Executive Summary: Pennsylvania is entertaining legislation to ban all non-compete covenants. Like other states concerned with the effects of restrictions on the mobility of the workforce, the prohibition on non-compete agreements, Pennsylvania House Bill 1938, is founded on the Commonwealth’s interest in lowering the unemployment rate, promoting innovation, entrepreneurship, and business expansion, improving existing business opportunities for qualified workers, and promoting unrestricted trade and mobility of employees in the workforce. 2017 PA H.B. 1938. Besides banning non-competes, the proposed law creates a private cause of action against any employer trying to enforce a non-compete covenant. Employers violating the law could be liable for compensatory and punitive damages and the former employee’s attorneys’ fees. The bill currently is before the House Labor & Industry Committee.
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