PRINTER'S NO. 145
THE GENERAL ASSEMBLY OF PENNSYLVANIA
HOUSE BILL
No.
171
Session of
2019
INTRODUCED BY CALTAGIRONE, DeLUCA, READSHAW, OTTEN AND HILL-
EVANS, JANUARY 28, 2019
REFERRED TO COMMITTEE ON LABOR AND INDUSTRY, JANUARY 28, 2019
AN ACT
Prohibiting enforcement of covenants not to compete in
employment agreements.
The General Assembly of the Commonwealth of Pennsylvania
hereby enacts as follows:
Section 1. Short title.
This act shall be known and may be cited as the Freedom to
Work Act.
Section 2. Declaration of policy.
The General Assembly finds and declares as follows:
(1) The Commonwealth has a strong interest in applying
its laws and protecting its businesses so they can hire the
employees of their choosing.
(2) The Commonwealth has a strong interest in lowering
the unemployment rate and providing individuals every
opportunity to make a living wage and maximize their talents
to provide for their family.
(3) The Commonwealth has a strong interest in promoting
increased wages and benefits for working families.
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(4) The Commonwealth has a strong interest in promoting
innovation, entrepreneurship, business expansion and
improving existing business opportunities to attract the best
qualified worker for open positions.
(5) The Commonwealth has a strong interest in promoting
unrestricted trade and mobility of employees in the work
force as well as promoting businesses' abilities to seek the
best qualified candidates for employment.
(6) The Commonwealth has a strong interest in workers
with high skill levels to increase their income and benefits.
(7) The Commonwealth has a strong interest in attracting
major multinational high-tech companies to this Commonwealth
who plan to invest billions of dollars and hire tens of
thousands of employees in high-paying jobs.
(8) The Commonwealth disfavors workers being forced to
decide between staying in jobs they are overqualified for or
leaving the State for better opportunities.
(9) The Commonwealth has a strong interest in providing
its residents with the tools needed to stay in Pennsylvania
to live, work and raise families.
Section 3. Definitions.
The following words and phrases when used in this act shall
have the meanings given to them in this section unless the
context clearly indicates otherwise:
"Covenant not to compete." An agreement between an employer
and employee that is designed to impede the ability of the
employee to seek employment with another employer.
Section 4. Prohibition.
Except as provided in section 5, a covenant not to compete is
illegal, unenforceable and void as a matter of law. No court may
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rewrite a covenant not to compete.
Section 5. Exceptions.
A covenant not to compete that satisfies any of the following
shall not be subject to section 4:
(1) A covenant not to compete that is reasonable and
involves an owner of a business that sells the business or
sells the goodwill in the business and that is reasonable.
(2) A covenant not to compete that involves a
dissolution or disassociation of a partnership or a limited
liability company.
(3) A covenant not to compete that is reasonable, in
effect prior to the effective date of this section and may
not be renewed.
Section 6. Attorney fees and damages.
An employee shall:
(1) Receive an award of attorney fees after prevailing
in a suit against an employer related to the enforcement of a
covenant not to compete.
(2) Be entitled to damages, including punitive damages,
after prevailing in a suit against an employer related to the
enforcement of a covenant not to compete.
Section 7. Venue, personal jurisdiction and governing law.
A dispute arising out of or related to a covenant not to
compete involving a resident of this Commonwealth shall be:
(1) Exclusively decided by a State court within this
Commonwealth.
(2) Governed by the laws of this Commonwealth.
Section 8. Effective date.
This act shall take effect immediately.
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