A company’s customer lists, price lists, marketing strategies, and other trade secrets are vital to its success. A smart business owner will ensure that key employees sign non-disclosure and non-compete agreements to protect the business if the employee leaves and takes a job with a competitor. But what if the company is sold? Does the buyer enjoy the benefits of the restrictive covenants contained in the selling company’s employment agreements? The answer is “it depends.” In Pennsylvania, if the purchase is structured as an asset purchase transaction, the buyer does not receive the benefit of the restrictive covenants contained in the seller’s agreements with its employees unless those agreements specifically state that the covenants are assignable. This is because these covenants are viewed as trade restraints that impair a former employee’s ability to earn a living and therefore are interpreted as narrowly as possible to protect the employer’s legitimate business interest.

The legal maze can be overwhelming and daunting but our goal is to demystify the process with our blog.  At AMM, we provide legal services to both businesses and individuals.  The topics selected are timely legal headliners as well as general issues our attorneys face in our diverse areas of practice.  The blog represents only the authors’ opinions and perspectives and we hope to provide useful information and tips addressing your concerns—for businesses and individuals.  We welcome your comments and suggestions to create a dynamic forum that will be of interest to readers and participants. 

The information contained in this blog is for educational purposes only and is not to be construed as legal advice. Legal advice must be tailored to the specific circumstances of each case. Further, nothing in this blog should be construed as creating an attorney-client relationship. It is not intended to be a full and exhaustive explanation of the law in any area. The law is complex and is subject to change and varying interpretations. This information is not intended as legal advice and may not be used as legal advice. It should not be used to replace the advice of your own legal counsel. Please consult with your own legal counsel regarding the state of the