Pennsylvania non-compete law: case law and the 2024 health care act
On this page
- What test do Pennsylvania courts use?
- Does a covenant signed mid-job need new consideration?
- Can a Pennsylvania court narrow an overbroad covenant?
- What does the 2024 health care act change?
- Pennsylvania non-compete rules at a glance
- What should a recruiter ask a Pennsylvania candidate?
- What is the risk to the hiring company?
- Is Pennsylvania changing its non-compete law?
- Where does the federal FTC rule stand?
- Staffing agencies and their own agreements
- A Pennsylvania checklist
- Questions people ask
Pennsylvania enforces reasonable employee non-competes under case law, and since January 1, 2025 it limits them by statute for five kinds of health care practitioners. Courts require a covenant to be ancillary to employment, supported by adequate consideration, reasonably limited in time and geography, and designed to protect a legitimate interest; a covenant signed after the job started needs new consideration under Socko (2015). The Fair Contracting for Health Care Practitioners Act (Act 74 of 2024) voids non-competes signed after 2024 by physicians, osteopaths, nurse anesthetists, nurse practitioners and physician assistants, unless the covenant lasts a year or less and the practitioner was not dismissed. That is the law as of October 2026.
For recruiters, Pennsylvania has three facts that decide most cases: when the covenant was signed, what the candidate got for signing it, and, for clinicians, their license and how they are leaving. The general screen is in non-compete questions for candidates, and agency-side clauses are in non-solicitation clauses for recruiters.
Not legal advice. This summarizes Act 74 of 2024 as published by the Pennsylvania General Assembly and leading Pennsylvania Supreme Court decisions, as of October 2026. Enforceability depends on the agreement, the facts and the court. Recruiters should not tell candidates whether their agreement holds.
What test do Pennsylvania courts use?
Outside health care, Pennsylvania has no non-compete statute; the rule is common law. The Pennsylvania Supreme Court treats restrictive covenants as disfavored restraints of trade and, in decisions including Hess v. Gebhard & Co. (2002) and Socko (2015), has described what an employment covenant needs to be enforced:
- it is ancillary to an employment relationship (signed at hiring, on a change of status, or with the sale of a business);
- it is supported by adequate consideration;
- it is reasonably limited in duration and geographic extent; and
- it is designed to protect the employer's legitimate interests, such as trade secrets, confidential information, goodwill and specialized training, not simply to stop competition.
There is no salary threshold, no advance-notice rule and no general list of exempt occupations. Pennsylvania courts weigh the employer's interest against the hardship to the employee and the public interest.
Does a covenant signed mid-job need new consideration?
Yes. In Socko v. Mid-Atlantic Systems of CPA, Inc. (2015), the Pennsylvania Supreme Court held that a non-compete entered into after employment begins must be supported by new consideration, such as a raise, a promotion or another change in status, and that language saying the parties "intend to be legally bound" does not replace it. A covenant handed to an existing employee with nothing new in return is open to challenge.
This is the opposite of Ohio, where continued at-will employment is enough; see Ohio non-compete law. For a recruiter, the useful fact is simple and harmless to ask: did you sign it when you were hired, or later, and did anything change when you signed?
Can a Pennsylvania court narrow an overbroad covenant?
Yes. Pennsylvania courts sitting in equity may modify an overbroad covenant and enforce the reasonable part, a power the Pennsylvania Supreme Court recognized in Sidco Paper Co. v. Aaron (1976). A two-year, multi-state restriction might be enforced for a shorter period, in a smaller territory, or only as to customers the employee served. As in Texas, Michigan or New Jersey, "it is too broad" is not a reason to tell a client there is no risk.
Example only: a Pittsburgh sales engineer signed a covenant at hiring barring work for "any competitor in North America" for 24 months. A court might enforce it for 12 months as to the engineer's own accounts in western Pennsylvania. The engineer is still restricted, more narrowly.
What does the 2024 health care act change?
The Fair Contracting for Health Care Practitioners Act (Act of July 17, 2024, P.L. 846, No. 74), enacted from HB 1633, took effect January 1, 2025. Its main rules:
| Provision | What the act says | Section |
|---|---|---|
| Who is covered | Medical doctors, doctors of osteopathy, certified registered nurse anesthetists, certified registered nurse practitioners and physician assistants | 3 |
| What counts as a noncompete covenant | An agreement between an employer and a practitioner in Pennsylvania that impedes the practitioner's ability to continue treating patients or accept new ones, independently or with a competing employer, after employment | 3 |
| General rule | A noncompete covenant entered into after the effective date is void and unenforceable by the employer | 4(a) |
| Exception | The employer may enforce a covenant of no more than one year, provided the practitioner was not dismissed by the employer | 4(b) |
| Expense recovery | Reasonable expenses for relocation, training and establishing a patient base may still be recovered if directly attributable, accrued within three years before separation (unless the practitioner was dismissed) and amortized over up to five years | 4(c)(1) |
| Ownership deals | The act does not void a covenant with a practitioner who has an interest in the business as a direct result of a sale, change of control or receipt of an ownership interest | 4(c)(2) |
| Patient notice | After a practitioner leaves, the employer notifies patients seen within the past year, within 90 days, where the outpatient relationship lasted two or more years | 5 |
Two limits matter for recruiting. First, the act covers only those five license types: registered nurses who are not nurse practitioners or nurse anesthetists, dentists, therapists and other clinicians stay under the common-law test. Second, it reaches covenants entered into after its effective date; a physician's 2023 covenant is judged under the law that applied when it was signed. Healthcare recruiters should therefore capture the license, the signing date, the covenant's length, and whether the practitioner resigned or was let go.
Pennsylvania non-compete rules at a glance
| Item | Pennsylvania rule (as of October 2026) | Source |
|---|---|---|
| General test | Ancillary to employment; adequate consideration; reasonable time and area; protects legitimate interests | Hess v. Gebhard (2002) |
| Signed mid-employment | Needs new consideration | Socko (2015) |
| Overbroad covenant | Court may modify and enforce the reasonable part | Sidco Paper (1976) |
| Covered health care practitioners | Covenants after January 1, 2025 void, except one year or less where not dismissed | Act 74 of 2024, section 4 |
| Patient notice | Within 90 days of departure | Act 74 of 2024, section 5 |
| Salary threshold or notice to employees | None | No general statute |
| Federal FTC rule | Vacated and removed from the Code of Federal Regulations | FTC; Federal Register, February 12, 2026 |
What should a recruiter ask a Pennsylvania candidate?
Ask early in the phone screen, in the same words for everyone, and record facts only.
PENNSYLVANIA CANDIDATE — restrictive agreements
1. "Have you signed a non-compete, a customer or employee non-solicit,
or a confidentiality agreement with your current or a past employer?"
2. "Did you sign it when you were hired, or later? If later, did
anything change then, such as pay, title or a bonus?"
3. "How long does it last, and what area, customers or work does it
cover?"
4. Health care roles: "Which license do you hold, and when was the
agreement signed?"
5. Health care roles: "Are you resigning, or is the employer ending
the role?" (record their words; do not probe the reasons)
6. "Does it say which state's law applies or where disputes go?"
Always: "We don't want any confidential information, documents or
patient or client lists from your current employer."- Do not tell a physician "Pennsylvania banned those." The act has a one-year exception and covers only newer covenants and five license types.
- Do not ask the candidate to describe the employer's pricing or forward a confidential agreement.
- Do record "12-month covenant, signed 2025, CRNP, resigning" rather than an opinion.
What is the risk to the hiring company?
For most roles, the realistic outcome of a Pennsylvania dispute is an injunction, possibly against a narrowed covenant, keeping the new hire away from certain customers, territory or work for a period. For covered practitioners, a covenant that falls outside the act's exception should be void, but expense-recovery clauses can still follow the clinician. In any field, former employers sometimes name the new employer, alleging interference with the contract or misuse of confidential information; that depends on what the new employer knew and did, which is for its counsel. Tell the client before final interviews, let counsel read the agreement before the offer, and confirm at the offer call that the company wants no confidential information.
Is Pennsylvania changing its non-compete law?
The 2024 act is the change that is in force, and the General Assembly's site lists no legislation amending it. Its section 6 directs the Health Care Cost Containment Council to study the act's effects within three years of the effective date and report to the Senate and House health committees, which may prompt further changes. For general employee non-competes, the courts' test still governs. Re-check the act's page before relying on this summary.
Where does the federal FTC rule stand?
It does not apply. The FTC's Noncompete Rule page notes the August 20, 2024 court order; the Commission voted on September 5, 2025 to accede to the vacatur; and a February 12, 2026 notice removed it from the Code of Federal Regulations.
Staffing agencies and their own agreements
If your agency asks its own recruiters to sign a non-compete after they start, Socko applies to you: give them something new for it. Healthcare staffing firms that employ covered practitioners directly should check their own clinician contracts against Act 74. For the other Pennsylvania rules on a hire, see hiring employees in Pennsylvania, the Pennsylvania staffing agency license guide and Pennsylvania background check laws; New Jersey candidates crossing the river are covered in New Jersey non-compete law.
A Pennsylvania checklist
- Restrictive-agreement question asked of every candidate, in the same words.
- Signing date and any new consideration recorded for covenants signed after hiring.
- Health care roles: license, signing date, covenant length and whether the practitioner resigned or was dismissed.
- Expense-recovery clauses noted for the client.
- No opinion on enforceability given; candidate pointed to their own lawyer.
- Client told before final interviews; counsel reviews before the offer.
Questions people ask
Are non-competes enforceable in Pennsylvania?
Yes, when a court finds them reasonable. Pennsylvania has no general non-compete statute as of October 2026. Under Pennsylvania Supreme Court decisions such as Hess v. Gebhard & Co. (2002), a covenant must be ancillary to employment, supported by adequate consideration, reasonably limited in time and geography, and designed to protect the employer's legitimate interests.
Is a non-compete signed after starting a job valid in Pennsylvania?
Only if the employee received new consideration for it. In Socko v. Mid-Atlantic Systems of CPA (2015), the Pennsylvania Supreme Court held that a covenant entered into after employment begins must be supported by new consideration, such as a raise or a change in job status, and that a statement that the parties intend to be legally bound does not substitute for it.
Are physician non-competes banned in Pennsylvania?
Not entirely. The Fair Contracting for Health Care Practitioners Act, Act 74 of 2024, effective January 1, 2025, voids noncompete covenants entered into after its effective date by medical doctors, osteopathic physicians, certified registered nurse anesthetists, certified registered nurse practitioners and physician assistants, except that an employer may enforce one lasting no more than one year if the practitioner was not dismissed.
Do Pennsylvania employers have to tell patients when a doctor leaves?
Yes, under Act 74 of 2024. After a covered practitioner departs, the employer must notify the practitioner's patients seen within the past year, within 90 days, of the departure and how to transfer records; the requirement applies where the practitioner had an ongoing outpatient relationship with the patient of two or more years.