Metalico Pittsburgh Inc. v. Newman, 160 A.3d 205

Newman and Medred signed identical three-year Employment Agreements with Metalico effective September 19, 2011, containing non-solicitation covenants tied to "compensation and benefits."
Agreements provided the covenants would apply during the Employment Period, would survive expiration as necessary to enforce the covenants, and imposed a one- or two-year Post-Employment Period measured from the last day of employment.
The three-year terms expired September 18, 2014; Metalico and the employees treated them thereafter as at-will employees (no renewal) and the employees remained employed until September 21, 2015.
After leaving Metalico, Newman and Medred took jobs with Allegheny Raw Materials (ARM); Metalico sued for breach of the non-solicitation covenants and tortious interference and sought a preliminary injunction.
ARM and the employees moved for partial summary judgment arguing the covenants became unenforceable after the 2014 expiration (or by novation) and thus did not cover the alleged post-employment solicitation; the trial court granted partial summary judgment for defendants.
The Superior Court reversed, holding the agreements’ plain language, read with controlling Pennsylvania precedent, preserved enforceable restrictive covenants beyond the three-year term and that consideration had not failed.

Issue	Plaintiff's Argument	Defendant's Argument	Held
Whether non-solicitation covenants lost consideration and became unenforceable when the three-year agreements expired and the parties continued in at-will employment	Metalico: covenants were supported by initial consideration and survived expiration per contract language; enforceable for the post-employment period measured from last day of employment	ARM/Employees: expiration and subsequent at-will arrangement replaced the contract (novation) or materially changed terms so consideration failed, making covenants unenforceable	Reversed trial court: initial consideration was received during the contract term; contract language (including §9(b)) preserved covenants after expiration and through post-employment period; no failure of consideration shown
Whether the trial court improperly resolved factual disputes in favor of defendants on summary judgment	Metalico: factual disputes existed about material changes and whether a novation occurred; summary judgment inappropriate	ARM/Employees: terms changed such that covenants no longer applied; summary judgment proper	Superior Court held trial court erred to the extent it resolved factual and legal issues by finding a failure of consideration; reversal based on contract language and precedent; remanded (court did not need to reach every factual dispute after deciding legal error)

Socko v. Mid-Atl. Sys. of CPA, Inc., 126 A.3d 1266 (Pa. 2015) (restrictive covenants enforceable only if ancillary to employment and supported by adequate consideration)
Pulse Technologies, Inc. v. Notaro, 67 A.3d 778 (Pa. 2013) (restrictive covenants signed as part of initial employment constitute adequate consideration)
Boyce v. Smith-Edwards-Dunlap Co., 580 A.2d 1382 (Pa. Super. 1990) (contract language can bind an employee to post-termination covenants even when employment continues after contract expiration)
Buttonwood Farms, Inc. v. Carson, 478 A.2d 484 (Pa. Super. 1984) (elements and burden to prove novation/substituted contract)
Synthes USA Sales, LLC v. Harrison, 83 A.3d 242 (Pa. Super. 2013) (contract language should be enforced as written; courts presume parties chose language deliberately)
McGuire v. Schneider, Inc., 534 A.2d 115 (Pa. Super. 1987) (failure of consideration means the promised consideration was never received)