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A Key Defense 

The courts will not enforce any agreement (including a non  compete agreement) if it lacks consideration. What is  consideration? It means, there must be something of value that  a party is seeking to get in exchange for what he is giving. A  one-sided promise is not enforceable. Plus any modification of a  contract must be supported by consideration. Otherwise,  contract (or modification) will not be enforceable.

Special Examples: Non-Competes
An employee’s acceptance of employment at-will is sufficient  consideration to support a restrictive agreement by an employee.  Morgan’s Home Equip. Corp. v. Martucci, 390 Pa.  618, 136 A.2d 838, 846 n.14 (1957).

Since the employment at-will relationship is mutual and either  party can terminate it any time, there is no reason to distinguish  between the employee’s consent to continue under new terms  from the employer’s consent not to terminate unless the  employee accepts the new terms. See Simko, Inc. v. Graymar, 55 Md. 561, 567, 464 A.2d 1104 (1983).

Time of Endorsement
Courts in various jurisdictions differ on whether a covenant to  compete must be signed at the beginning of the employment  relationship in order for it to be valid. For example, certain jurisdictions hold that even though an  employer fails to reference any restriction on post-employment  competition, a covenant signed after the employment  commenced provides sufficient consideration for an enforceable  covenant. See, e.g., Herr v. Heiman, 75 F.3d 1509, 1514-15  (10th Cir.1996); Ellis v. James V. Hurson, 565 A.2d 615, 620  (D.C. 1989)(substantial period of employment following signing of  covenant); Paramount Termite Control, 380 S.E.2d at 926;  Marine Contractors Co. v. Hurley, 365 Mass. 280, 310 N.E. 2d  915 (1974)(subsequent covenant is ancillary to original  employment contract); Arthur Young & Co. v. Galasso, 142  Misc.2d 738, 538 N.Y.S.2d 424, (Sup. Ct. 1989); Puritan-  Bennett Corp. v. Richter, 8 Kan.App.2d 311, 657 P.2d 589, 591  (1989).

Other states hold that a non compete agreement that is not  included in the original employment contract, but added later in a  contract for ongoing employment, is voidable for lack of  consideration. Universal Hosp. Serv. Inc. v. Henderson, D. Minn.,  No. 02-951, 5/20/02 (there, the court denied an employer’s  effort to restrain a former employee from working for competitor,  finding non compete agreement may be invalid because not  signed until five days after employment commenced); Pacific  Veterinary Hosp. v. White, 72 Or.App. 533, 696 P.2d 570, 573  (1985), citing 1983 OREGON LAWS CH. 828, § 1; Morgan Lumber  Sales Co. v. Toth, 41 Ohio Misc. 17, 321 N.E.2d 907
(1974).

A non-competition agreement signed after an employee has  begun working can be sustained only if supported by promise or  payment. Insulation Corporation of America v. Brobston, 446 Pa.  Super. 520, 529; 667 A.2d 729, 733 (1995); Satellite Indus. v.  Keeling, 396 N.W.2d 635, 639 (Minn.App. 1986). b. Continuation  of employment is not sufficient consideration for a covenant  despite the fact that the employment relationship was terminable  at-will. George W. Kistler, Inc. v. O’Brien, 464 Pa. 475, 347 A.2d  311, 316 (1975).

The courts look to whether the employee enjoyed a beneficial  change in status, and if so, sufficient consideration will exist to  support a restrictive covenant agreed to after employment  commences. M.S. Jacobs & Assocs. v. Duffey, 452 Pa. 143, 303  A.2d 921, 922 (1973).

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