The Pennsylvania Superior Court, in Metalico Pittsburgh v. Newman, (No. 354 WDA 2016, April 19), dealt a blow to employees attempting to avoid the application of a nonsolicitation covenant.
In Metalico, two employees, Douglas Newman and Ray Medred, executed employment agreements containing a covenant not to solicit customers, suppliers and employees during the “post-employment period.” The post-employment period varied depending upon the manner of the termination of employment, and commenced upon the last day of employment with Metalico. At the end of the three-year period, Metalico terminated the employment agreements, but continued to retain Newman and Medred as “at-will” employees, and recited new compensation and other terms of employment. These terms differed from those contained in the employment agreement. Newman and Medred were terminated one year later. Metalico filed suit against Newman and Medred, alleging that they were violating the nonsolicitation covenant in their subsequent employment.
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