WorkFlow One Files Bankruptcy - and You Want Out of Your Non-Compete Agreement

WorkFlow One has filed bankruptcy in Virginia.  Many employees, and particularly salespeople, are concerned about the future of the Company.  We have substantial experience in dealing with Non-Compete issues with WorkFlow One.  The attached Opinion, for example, is a case we won in the Chester County Court of Common Pleas.  In that case, we won our client's right to work for a competitor of WorkFlow One, and to service clients that he had represented for many years.

If you have a non-compete agreement with Standard Forms, Reynolds and Reynolds or WorkFlow One, and are interested in pursuing your options in view of the recent bankruptcy, John A. Gallagher may be able to help you.

If you would like to discuss your situation, e-mail me today of call us at 610-647-5027.

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Non-Compete Agreements - A Few Things to Keep in Mind

Philadelphia Area Employment Lawyer Experienced in Fighting Non-Competition Agreements With Offices in Paoli, Exton, Radnor, King of Prussia, Plymouth Meeting and Center City

At the Gallagher Law Group, we represent only employees with workplace rights issues. Call 610-647-5027, e-mail me directly or send an e-mail inquiry via the "Fill Out My Form" box to the upper right of this page. We will respond promptly with an analysis of your situation, and discuss potential options going forward at no cost to you.

If you need an Experienced Non-Compete Attorney to help you, John A. Gallagher has been practicing Employment Law in Pennsylvania since 1991. You may also visit our Website for more information about our Firm..

What Should I Look or in my Non-Competition Agreement?

A few simple starting points. (we will be discussing additional principles in the future; for past blogs on non-competition agreements, just use the Search bar to the right). 

First, you need to know what state's law will govern its enforceability.  This is usually found near the end of the agreement; often times, it will be the law of the home office of the company.  Every state has different laws regarding non-compete agreements, so this is a critical starting point.

Second, you need to know where any litigation arising out of the non-compete will be held.  This is usually located in the same paragraph as the "choice of law" provision discussed above.  Often, the forum for any litigation will be in the county in which the home office of the employer is located.

Since most non-compete agreements require you to consent both to the law governing the agreement and the location where any dispute will be fought, these are important starting points to understanding the strengths and weaknesses of your position.  Being sued in Chicago, and having your dispute governed by Illinois law, is a lot different to being sued in Montgomery County under Pennsylvania law!  

Third, you want to know if the prevailing party in any case will be awarded their legal fees.  Somewhere in the agreement, this is usually discussed.  There are three possibilities: 1) if there is no language about attorney fees, then each party pays its own fees, win or lose; 2) if the language says that you pay the attorney fees of the company if it prevails in any litigation against you, that will be the way it goes - you pay your own fees no matter what, and pay your ex-employer's fees if they win the case; or, 3) if the language says that the "prevailing party" in any litigation pays the other side's legal fees then, if you win, the other side must pay for your fees, and vice versa.  The latter scenario is the one that provides the greatest potential disincentive to an employer that is thinking of suing you in a "close case."

Labor Lawyer Specializing in Non-Compete Contracts Serving Employees in Locations Such as Paoli, Malvern, West Chester, Downingtown, Phoenixville, Norristown, Lansdale, Collegeville, Pottstown, Media, Newtown Square, Radnor, Villanova, Wayne and Surrounding Areas

We regularly counsel employees on complicated and important employment-related issues. Few things are more important than our job. If you have questions about your job, call us today and we will spend some time speaking with you about it at no cost to you. If we believe we can be helpful, we will discuss options for proceeding further on your behalf.

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Non-Compete Law Firm in Philadelphia Area

Our Law Firm Concentrates on Helping Employees With Non-Competition Agreements Governed by Pennsylvania Law

Here are some answers to some of the most common questions I am asked about non-compete
agreements:

What is the Difference Between Non-Competition and Non-Solicitation?

Although commonly referred to as "non-compete agreements," these contracts typicallycontain 3 separate covenants of none: Confidentiality, Non-Confidentiality" and Non-Solicitation.  And each such covenant is treated differently under the law.

What Law is Used to Decide the Enforceability of My Non-Compete Agreement?

The majority non-compete agreement contains a "forum selection clause."  Therein will lie your answer.

Can the Company Enforce My Non-Compete Agreement if I am Fired?

Under Pennsylvania law, if you are let go for poor performance, your non-compete covenant is not enforceable.  Similarly, if you are laid off as part of a reduction in force, it will be difficult to enforce the non-compete.  However, your non-solicitation obligation will likely remain in full force and effect under these circumstances.

Are Non- Competition Agreements Enforceable in Pennsylvania?

Target New Customers, Not Old

Generally, Pennsylvania Courts do not enforce the non-competition component of such agreements if you are not interfering with your former employer's business.  If you solicit former customers, however, they will nearly always enforce the non-solicitation component of such agreements.

So, in other words, if you bare an "average" employee and merely join a company that competes with your former employer, courts will be very hesitant to force you to quit your new job.  However, if at your new job you solicit customers or clients that you serviced during your employment with your former employer, courts will generally enforce your non-compete agreement.

Nooks and Crannies = Trade Secret

NOTE:  If you posses trade secrets of your former employer, a Pennsylvania court will order you to stop working for its competitor even if you do not solicit any of its former customers. 

NOTE:  Arguing that your non-compete should be invalidated because it is for too long a duration or because it covers too broad of a geographic area, i.e. is "overly broad," will not work in Pennsylvania.

If a Former Customer Asks Me to Handle its Business, am I in Violation of My Non-Solicitation Agreement in Pennsylvania?

In general terms, if you are bound by a non-solicitation provision, and nevertheless take business from your former employer, the Court will stop you by enforcing the non-solicitation component of your non-compete agreement.  The key to avoiding problems with a non-compete agreement is you avoid taking any business from your former employer.

Does it Matter When I Signed the Non-Compete?


When Did You Sign?

In Pennsylvania, non-competition agreements are enforceable if they are entered into when you start employment.  If you are required to sign a non-compete agreement months or years after you start employment, it will be enforceable only if the employer gives you "additional consideration," i.e. a raise, a bonus, a promotion, opportunity to participate in a stock option plan, etc. at the time that they have you execute the non-compete agreement.

Can I Negotiate My Non-Compete Agreement?

There are a lot of work arounds and negotiating tactics you can use to minimize the impact of a non-compete agreement.  However, once you have "stepped in it," it becomes harder to extricate the former employee for a non-compete dispute.  Therefore, it is better to consult with counsel first concerning the "dos and dont's" where non-competes are concerned before taking any major steps.

John A. Gallagheris an employment lawyer who represents employees in Pennsylvania.

Click Here if you have questions about any aspect of employment law, from wrongful termination, to wage and overtime claims, to discrimination and retaliation laws, to Family and Medical Leave…

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Thanks for checking in with us.

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