CRANBERRY TWP — The Pennsylvania Supreme Court invalidated a Cranberry business' “no-hire” clause in a contract with another trucking company, determining it “undermines free competition in the labor market.”

In a ruling issued Thursday, the state high court deemed unenforceable an agreement between Cranberry-based Pittsburgh Logistics Systems Inc. and Aliquippa-based Beemac Inc. that forbade Beemac from hiring the Cranberry company's employees during and for a period of two years after an automatically renewing contract between the two.

The case ended up before the state Supreme Court after Beemac in 2016 hired four employees of Pittsburgh Logistics Systems, or PLS, prompting the latter to file suit in Beaver County for violating the “no-hire” clause. Both the Beaver County trial court and the state Superior Court denied PLS' request to prevent the employees from working at Beemac while the case was being decided, saying it was unlikely PLS would prevail on the merits of the case.

Separately, the county and appellate courts ruled against PLS in another case it filed against the four former employees, with the courts saying the company's non-compete agreement with the employees was so geographically broad and written to be unchallengeable that it indicated “an intent to oppress the employee or foster a monopoly.”

PLS' failure in the case against its former employees was one of the reasons the Superior Court ruled against it in the Beemac case.

“If ... restrictions to the agreement between an employer and employee are rendered unenforceable by a lack of additional consideration, PLS should not be entitled to circumvent that outcome through an agreement with a third party,” the appellate court's opinion stated.

Two judges dissented from the Circuit Court's ruling, in part because they disagreed that a two-company contract should be treated similarly to a covenant between employer and employee.

The state's high court relied on additional and different reasons, such as ruling that while PLS had an interest in preventing Beemac and similar business partners from “poaching” employees due to specialized knowledge gained during their time at PLS, the no-hire clause “is both greater than needed to protect PLS' interest and creates a probability of harm to the public.”

Additionally, the court ruled, such provisions restrict employees' future prospects without providing them any benefit.

“The no-hire provision impairs the employment opportunities of PLS employees, who are not parties to the contract, without their knowledge or consent and without providing consideration in exchange for this impairment,” the ruling stated.

PLS did not immediately respond to a request for comment. Loren Dworakowski, Beemac president and CEO, said he is “happy with the outcome and think(s) it is fair.”