No-Hire Provision Held Unenforceable by Pennsylvania Supreme Court

About 5 months ago, the Pennsylvania Supreme Court found a no-hire provision between competing businesses to be void and unenforceable, as a matter of public policy, in the case of Pittsburgh Logistics Systems, Inc. v. Beemac Trucking, LLC et al., 249 A.3d 918.

The Supreme Court addressed whether contractual no-hire provisions, that are part of a services contract between sophisticated business entities, are enforceable under Pennsylvania law.

In Pittsburgh Logistics Systems, Inc. v. Beemac Trucking, LLC et al, the Supreme Court concluded that while there was a legitimate interest for the no-hire provision, the restraint was overly broad and harmful to the public. The Court found:

(1) the no-hire provision impaired employment opportunities and job mobility of employees not party to the contract without their knowledge or consent; and

(2) the provision undermined free competition in the labor market.