Noncompetition Agreement. Reappraisal of Anti-Poaching and Noncompetes in Franchising
No-poach clauses and no-solicitation clauses are post-employment restrictions against competition. In franchise agreements, these clauses usually are drafted to prevent franchisees from raiding the employees of other franchisees or of the franchisor.
June 17, 2021 at 01:44 PM
6 minute read
Let's review the status of activity restrictions in franchise agreements. Do they serve the purpose intended? Are they enforceable? Are they worth it? The Pennsylvania Supreme Court's decision in Pittsburgh Logistics Systems v. Beemac Trucking, No. 31 WAP 2019 (PA 4/29/2021) applies an analysis usually used to evaluate covenants not to compete, and concludes that on the facts presented, the no-poach clause was unenforceable as written. The case is instructive for all franchisors because its reasoning will be followed in other states.
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