The Pennsylvania Supreme Court ruled Thursday that a no-hire provision between two Pittsburgh-based logistics firms is not enforceable under commonwealth law.
In its decision, the high court affirmed a Superior Court ruling that found the “no-hire, no-poach” agreement between freight broker Pittsburgh Logistics Systems (PLS) and Beemac Trucking, headquartered in Ambridge, Pennsylvania, was an unreasonable restriction of free trade.
“The no-hire provision undermines free competition in the labor market in the shipping and logistics industry, which creates a likelihood of harm to the general public,” Justice Sallie Mundy wrote in the opinion.
What happened?
In 2010, PLS required Beemac to enter into a no-poach agreement, stating that the companies would not hire or recruit each other’s employees during the time covered by the contract and for two years after its termination.
PLS filed suit in the Court of Common Pleas of Beaver County Court in Pennsylvania in 2016, claiming Beemac had violated the “no-poach” agreement by hiring four of its employees.
The court sided with Beemac, ruling that PLS’ enforcement of the no-hire provision “would have deprived its former employees of their current jobs and livelihoods.”
“We believe these types of no-hire contracts should be void against public policy because they essentially force a non-compete agreement on employees of companies without their consent, or even knowledge, in some cases,” the court ruled.
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