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The Supreme Court of Pennsylvania recently held unenforceable a no-hire provision in a service contract between a logistics company and a trucking firm. In
Pittsburgh Logistics Systems, Inc. v. Beemac Trucking LLC, et. al., the court reasoned that the no-hire provision at issue was overly broad and undermined fair competition for employees in the shipping and logistics industry.
Background
The case was between Pittsburgh Logistics Systems, Inc. (PLS), “a third-party logistics provider that arranges for the shipping of its customers’ freight with selected trucking companies,” and Beemac Trucking, LLC, one of the trucking companies it used. The two companies had entered into an agreement that prohibited Beemac from hiring any PLS employees. Beemac nonetheless hired four of PLS’s employees in violation of the no-hire provision.
Monday, May 3, 2021
The Pennsylvania Supreme Court recently held that a contractual no-hire or “no poach” provision in a services contract between sophisticated business entities is not enforceable under the laws of the Commonwealth of Pennsylvania. This important case is entitled
Pittsburgh Systems, Inc. v. Beemac Trucking, et. al., case no. 31 WAP 2019.
On August 30, 2010, Plaintiff, Pittsburgh Logistics Systems, Inc. (PLS) a third-party logistics provides that arranges for the shipping of its’ customers’ freight with selected trucking companies entered into a written agreement with Defendant, Beemac Trucking (“Beemac”), a shipping company that conducted non-exclusive business with PLS. That contract contained both non-solicitation and no-hire provisions. While that contract was in force, Beemac hired four PLS employees, who were not parties to the agreement between these two sophisticated entities.
While the Pennsylvania Supreme Court unanimously deemed a broad no-poach agreement between two companies void as a matter of public policy Thursday, attorneys say the justices left the door open for employers to respond with more narrowly tailored provisions designed to pass legal muster.
Pa. High Court Points Way To Valid Employer No-Poach Deals law360.com - get the latest breaking news, showbiz & celebrity photos, sport news & rumours, viral videos and top stories from law360.com Daily Mail and Mail on Sunday newspapers.
Anti-poaching deal between logistics firms unenforceable, Pa. high court rules
Agreement undermines free competition in the labor market in the shipping and logistics industry 1 minute read Pennsylvania Supreme Court ruled that anti-poaching agreement between Pittsburgh Logistics Systems and Beemac Trucking was unenforceable. Photo: Shutterstock
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.