[J-40-2015] IN THE SUPREME COURT OF PENNSYLVANIA

MIDDLE DISTRICT

SAYLOR, C.J., EAKIN, BAER, TODD, STEVENS, JJ.

DAVID M. SOCKO, Appellee

v.

MID-ATLANTIC SYSTEMS OF CPA, INC., Appellant : : : : : : : : : : : : No. 142 MAP 2014 Appeal from the Order of the Superior Court dated May 13, 2014 at No. 1223 MDA 2013, affirming the Order of the Court of Common Pleas of York County, Civil Division, dated October 15, 2012 at No. 2012-SU-001608-44 ARGUED: May 6, 2015

OPINION

MADAME JUSTICE TODD DECIDED: November 18, 2015 In this appeal by allowance, we consider an issue of first impression: whether the enforcement of an employment agreement containing a restrictive covenant not to compete, entered into after the commencement of employ ment, may be challenged by an employee for a lack of consideration, where the ag reement, by its express terms, states that the parties “intend to be legally bound,” which language implicates the insulating effect of the Uniform Written Obligations A ct (“UWOA”). 1 In light of our Commonwealth’s long history of disfavoring restrictive covenants, and the mandate that covenants not to compete entered into after the commence ment of employment must be accompanied by new and valuable consideration — a ben efit or change in

1 Act of May 13, 1927, P.L. 985, No. 475, § 1 (33 P.S . § 6).[J-40-2015] - 2

employment status — we conclude an employee is not preclud ed from challenging such an agreement executed pursuant to the UWOA. Thus, we affirm the order of the Superior Court. The facts underlying this appeal are not in dispute. Appellant Mid-Atlantic Systems of CPA, Inc. (“Mid-Atlantic”) is in the business of providing basement waterproofing services. Mid-Atlantic hired Appellee Da vid Socko (“Socko”) in March 2007 as a salesperson. At this time, Socko executed a two- year employment contract containing a covenant not to compete. In February 20 09, Socko resigned from his employment with Mid-Atlantic, but the company rehired him four months later, in June 2009. At his time of rehire, Socko signed a new empl oyment agreement containing another two-year covenant not to compete. While still employed by Mid-Atlantic, on December 28, 2010, Socko signed a third, more restrictive, agreement, entitled “the Non -Competition Agreement” (“Agreement”), which, by its terms, superseded all prior agreements. Pursuant to the Agreement, which is at the heart of his appeal, Socko wa s not permitted to compete with Mid-Atlantic for two years after the termination of his employment in any of the following locations: Connecticut, the District of Columb ia, Delaware, Maryland, New Jersey, Pennsylvania, New York, Virginia, West Virginia , or any other jurisdiction in which Mid-Atlantic did business. The Agreement also expr essly provided for the application of Pennsylvania law, and stated that the p arties intended to be “legally

bound.” On January 16, 2012, Socko resigned from his employment with Mid-Atlantic and, a few weeks later, accepted a position with Pennsyl vania Basement Waterproofing, located in Camp Hill, Pennsylvania, wh ich was a competitor of MidAtlantic. Approximately one month later, Mid-Atlant ic informed Socko’s new employer[J-40-2015] - 3

of the terms of Socko’s prior employment with Mid-Atla ntic, attached a copy of the Agreement, and threatened litigation. Ten days late r, Pennsylvania Basement Waterproofing terminated Socko’s employment. As a result of his termination, on April 13, 2012, Socko filed a Complaint and Action for Declaratory Judgment against Mid-Atlantic in the York County Court of Common Pleas. In support thereof, Socko filed a motio n for partial summary judgment, asserting that the non-competition clause in the Agreeme nt was unenforceable, as it was not supported by sufficient consideration. It was no t disputed by the parties that the Agreement was signed during the course of Socko’s e mployment, and that Socko did not receive any benefit or any change in his existi ng employment status in exchange for signing the Agreement. Mid-Atlantic, however, cit ing the parties’ pledge in the Agreement to be “legally bound,” contended that the UWOA did not allow Socko to challenge the validity of the terms of the Agreement o n the basis of a lack of

consideration. 2 The trial court granted Socko’s motion for partial summa ry judgment, offering in a well-written opinion, that there was a want of consid eration in exchange for Socko’s execution of the Agreement after he had commenced his employment. Further, the court reasoned that the mere intent by Socko, as expressed in the Agreement, to be “legally bound,” did not constitute adequate considera tion under the UWOA. 3

2 Pursuant to the dictates of the UWOA, a written promi se “shall not be invalid or unenforceable for lack of consideration, if the writing also contains an additional express statement, in any form of language, that the signer i ntends to be legally bound.” 33 P.S. § 6. 3 Socko also asserted claims against Mid-Atlantic pursuant to the Pennsylvania Wage Payment and Collection Law, 43 P.S. § 260.3. These claims were settled and discontinued on June 12, 2013.[J-40-2015] - 4

On appeal, a unanimous panel of the Superior Court, in a thorough and scholarly published opinion authored by Judge Christine Donohue, affirmed the trial court’s granting of Socko’s motion for partial summary judgme nt. Socko v. Mid-Atlantic Systems of CPA, Inc., 99 A.3d 928 (Pa. Super. 2014). After tracing the history of the treatment, and disfavor of, restrictive covenants in Pennsylvania, the court explained that, when an employee enters into an employment cont ract subsequent to the commencement of employment, which contains a covenant no t to compete, the covenant must be supported by new consideration in the f orm of a benefit to the employee or a beneficial change to his or her employme nt status.

The court went on to consider the effect of the UWOA in light of the substantial common law public policy disfavoring restrictive covenants . The court acknowledged that the statute provided that a written promise shall not be invalid or unenforceable for lack of consideration if the writing also contains an expr ess statement that the signer “intends to be legally bound,” 33 P.S. § 6, and that Pennsylvania courts have interpreted this section to mean that, in certain circumstances, a wr itten agreement containing the express statement to be legally bound is not void for l ack of consideration. Nevertheless, the Superior Court observed that, while, typically, and under the UWOA, courts will not inquire as to the adequacy of considerati on, the area of restrictive covenants in employment contracts is an exception to this g eneral rule. Importantly, the court pointed out that, while our Court has held that a contract under seal imports consideration which a party is not permitted to deny, su ch a seal is deemed inadequate consideration to support a covenant in restraint of tr ade; furthermore, the Superior Court reasoned that the seal and the UWOA had the same lega l effect — to import

consideration into a contract and eliminate the need fo r evidence of consideration.[J-40-2015] - 5

Thus, the court concluded that for a covenant not to comp ete to be enforceable, an employee must receive actual and valuable considerat ion for signing an employment agreement containing such a restrictive covenant, and tha t contract language “agreeing to be legally bound,” which satisfies the UWOA, neverth eless fails to provide the employee an actual benefit, and, therefore, is inadeq uate to support the enforcement of such a covenant. As Mid-Atlantic did not provide actual and valuable consideration to Socko when he executed the Agreement, the Superior Cou rt concluded that the trial court properly found the Agreement to be unenforceabl e. Mid-Atlantic filed a petition for allowance of appeal , which we granted to address the following question: whether an employment agree ment containing a restrictive covenant not to compete, entered into after the comme ncement of employment, is unenforceable for lack of consideration where the emplo yer provided the employee with no benefit or change in employment status at the time of execution, but where the agreement expressly states that the parties “intend to be legally bound” by its terms. See Socko v. Mid-Atlantic Systems of CPA, Inc., 105 A.3d 659 (Pa. 2014) (order). 4 As

4 We granted allocatur on three issues, as raised by Mid-A tlantic, but these issues more accurately represent sub-arguments pertaining to the sin gular issue before the Court. The issues on which we granted appeal are:

1) Did the Superior Court misconstrue the [UWOA] considering the UWOA is not a "substitute for consideratio n," nor is it intended to "rectify a lack of consideration" a s the Superior Court asserts, but instead, is a statute that m erely prevents a party to a written agreement in which the party expresses an intention to be legally bound from later challenging that validity of the contract based upon lack of consideration? (2) Did the Superior Court erroneously rely upon alle gedly analogous "seal" cases to support its determination tha t the UWOA does not provide consideration for a non-competiti on (continuedL)[J-40-2015] - 6

the issue before us concerns the construction of the UWO A, and, thus, raises a pure question of law, our standard of review is de novo , and our scope of review is plenary. DEP v. Cumberland Coal Resources, LP, 102 A.3d 962, 97 0 (Pa. 2014); Buffalo Twp. v. Jones, 813 A.2d 659, 664 n.4 (Pa. 2002). Mid-Atlantic’s primary argument is that the Superior C ourt improperly determined that the UWOA serves as “consideration, or a substitute f or consideration” and that the statute intended to “rectify a lack of consideration.” Appellant’s Brief at 15. Mid-Atlantic

submits that the UWOA is not a substitute for considerati on, but, rather, prohibits a party to a written agreement in which the party expresses an intention to be “legally bound” from later challenging the contract based on a lack of consideration. 5 Mid-Atlantic agrees with Socko that additional valuable consideration must be provided to an employee that signs a non-compete subsequent to the comme ncement of the employment relationship, but takes the position that, even if there is not additional valuable consideration, as the case here, nevertheless, u nder the UWOA, the “legally bound” language acts as a bar to a challenge to the va lidity of the agreement based upon a lack of consideration, citing McGuire v. Schneider, Inc., 534 A.2d 115, 118 (Pa.

(Lcontinued) restrictive covenant entered into subsequent to the

commencement of the employment relation, considering a seal on a document has long been held to [import] consideration, whereas, to the contrary, the UWOA does not [import] consideration, and the authority relied upon by the Superior Court did not support this conclusion[?] (3) Did the Superior Court impermissibly amend the UW OA under the guise of interpreting it?

5 While it is questionable whether this estoppel line of advocacy was fully raised before the tribunals below, we will nevertheless address Mid-At lantic’s arguments in this regard.[J-40-2015] - 7

Super. 1987) (“Under the [UWOA], that statement of i ntent removes lack of consideration as a ground for avoiding the contract.”), as well as certain federal and trial court decisions in support of its position. Mid-Atlantic goes on to list numerous rights which a part y may contract away for a benefit, such as the right to a jury trial, forum se lection, right to seek relief in court, and choice of law. Here, according to Mid-Atlantic, the agreement to be legally bound contracts away the right to later challenge the contract on the basis of a lack of consideration. For this reason, Mid-Atlantic further asse rts that the Superior Court’s reliance on contract-under-seal cases is misplaced, as in Mid -Atlantic’s view, the seal (supplying consideration to support a covenant) and the UWOA (prohibiting a later challenge for lack of consideration), as described above , do not have the same effect. Mid-Atlantic rejects as dicta language in the cases relied upon by the Superior Co urt for the proposition that a seal and the UWOA share the sa me legal effect — namely, to import consideration into a contract and eliminate the need for proof of the existence of consideration. See Morgan’s Home Equip. Corp. v. Mart ucci, 136 A.2d 838 (Pa. 1957); Fedun v. Mike’s Café, Inc., 204 A.2d 776 (Pa. Super. 1 964). Related thereto, Mid-Atlantic argues that, while the import of the seal under the common law may be altered by courts, the UWOA may not be rewritten by the Superior Court under the guise of interpretation. Employing tools of statutory construction, MidAtlantic maintains that the plain and unambiguous lang uage of the UWOA controls over any offering by Socko of the history of the Model Act, as discussed more fully below. Mid-Atlantic stresses that the Superior Court may not le gislate, and, here, the clear language of the UWOA covers all agreements, including t he Agreement at issue herein, which contain the operative language of the UWOA. Mi d-Atlantic also urges our Court to decline Socko’s request to find an exception to the U WOA for non-compete[J-40-2015] - 8

agreements where none exists, and to hold that a non-co mpetition restrictive covenant entered into after the commencement of employment ma y not be deemed to be void for lack of consideration pursuant to the UWOA when the empl oyee agrees to be legally bound by its terms. Socko counters that Mid-Atlantic’s interpretation of the UWOA is inconsistent with the well-established principle that a restrictive covenan t entered into after the commencement of the employment relationship is not enf orceable — that is, is void as against public policy — if it lacks valuable consideration. Socko provides that restrictive covenants historically have been disfavored by the cour ts, as they are viewed as a restraint of trade preventing a former employee from earning a living. Socko asserts that, on one hand, Mid-Atlantic accepts that the UWOA is not a substitute for consideration, and does not disturb the requirement tha t valuable consideration is needed to support a restrictive covenant; but, on the o ther hand, Mid-Atlantic avers the UWOA nevertheless precludes a party to a non-compete agr eement from challenging the covenant if valuable consideration is not provided. Socko warns that, as the boilerplate language that the parties “intend to be legally bound” appears in almost every contract in Pennsylvania, the practical effect of M id-Atlantic’s interpretation of the

UWOA would be the elimination of the consideration re quirement for restrictive covenants. Contrary to Mid-Atlantic’s position, Socko de velops that our Court has stated that the UWOA’s language as applied to a typical contract is a substitute for consideration. See Morgan’s. Socko further rejects Mid-A tlantic’s reliance on the Superior Court’s decision in McGuire for the proposition that the UWOA acts as a bar to a challenge based on lack of consideration, as, according t o Socko, that decision did not involve a restrictive covenant, the reference to th e UWOA was dicta , and subsequent Superior Court decisions involving restrictive co venants have made clear[J-40-2015] - 9

that the UWOA is not a remedy for a lack of consideratio n for a restrictive covenant in an employment agreement. Further, Socko maintains that the Superior Court’s cita tion to contract-under-seal cases was appropriate, as the language which satisfies the U WOA serves as a

substitute for consideration in the same manner that a seal serves as a substitute for

consideration. Socko offers that a “contract under seal i mports consideration that a party is not permitted to deny,” Appellee’s Brief at 9 (quoting Gompers v. Rochester, 56 Pa. 194, 197 (1868)), but highlights that the only e xception to the rule is when the contract involves a restraint of trade, citing Selden v. Jackson, 230 A.2d 197, 197-98 (Pa. 1967). Socko further argues that reliance upon se al decisions was proper, noting that in Morgan’s, our Court stated that the practical e ffect of a statement of intent to be legally bound under the UWOA is the equivalent of sig ning the agreement under seal. Similarly, Socko responds to Mid-Atlantic’s claim that th e Superior Court effectively amended the UWOA, pointing out that the court carefully and correctly applied 150 years of jurisprudence regarding agreemen ts in restraint of trade to the facts of this case. Indeed, Socko highlights Professor Samue l Williston’s understanding of the UWOA when he drafted the Model Act in 1925, a nd envisioned it to act as a

moderate and reasonable substitute to the use of seals. Further, Socko emphasizes that the Model Act was promulgated in 1925, Pennsylva nia enacted the statute in 1927, and while Utah, the only other state to do so, adopt ed the UWOA in 1929, it repealed the statute four years later, leaving Pennsylvania as th e only state to retain the uniform rule. Socko emphasizes, however, that it was never sugg ested that the statute was enacted to circumvent Pennsylvania law regarding agreem ents in restraint of trade, which, according to Socko, was well-established at the time the UWOA was enacted.[J-40-2015] - 10

Amicus Richard Matesic, a solo practitioner from Shaler Townsh ip, Allegheny County, Pennsylvania, who represents individuals in emp loyment and consumer protection litigation, provides a history of the UWOA and disputes Mid-Atlantic’s interpretation of the act as being against the public policy of the Commonwealth, which prohibits the enforcement of a non-competition agreem ent without adequate consideration and which discourages restraints of trade. Amicus contends that, while there exists no legislative history regarding the passage of the UWOA, the various

commissioners of the National Conference of Commissioners o n Uniform State Laws, including Professor Williston, “advanced a libertarian v iew, one that frankly ignored the

social costs attendant in enforcement of adhesive contracts ; they believed any person should be free to bind themselves irrevocably to an ob ligation, simply by signing a document containing the words that the promisor ‘intend [ed] to be legally bound.’” Amicus Brief at 8. Yet, Amicus maintains that, at these discussions, Williston also was of the view that the statute would not prevent a cour t sitting in equity from refusing to enforce a signed agreement containing the “legally bou nd” verbiage. According to

Amicus , application of the UWOA would lead to an absurd and unreasonable result, as restraints on trade have been historically disfavored in the law, new and valuable consideration must be conferred on a currently employe d individual for a new promise not to compete, and application of the UWOA, as inte rpreted by Mid-Atlantic, would deprive a court from ever determining whether adequa te compensation was paid. Our analysis begins with a review of our Commonwealth ’s treatment of employment agreements containing restrictive covenants at common law. Well before Horace Wood’s 1877 treatise on master and servant, 6 which widely accelerated the universal adoption of the at-will employment doctrine by the various states,

6 H. Wood, A Treatise on the Law of Master and Servan t § 136 (2d ed. 1886).[J-40-2015] - 11

Pennsylvania embraced the notion that, in employment contracts of indefinite duration, either party could sever that relationship at will — t hat is, for any reason or no reason. Kirk v. Hartman & Co., 63 Pa. 97, 105 (1870) (“When . . . a person is employed as an agent, traveller [sic] or salesman, for no definite tim e, the law does not imply a hiring by the year, but at the will of both parties, and the p rincipal has a right to terminate it at any time, and to discharge the agent from his service withou t notice.”); Peacock v. Cummings, 46 Pa. 434, 437 (1864) (“Duration of service was left to be defined by agreement, outside of the articles, or, if not defined , it was necessarily at will.”). While of considerable vintage, the at-will doctrine retains i ts vitality in Pennsylvania to this day. Weaver v. Harpster, 975 A.2d 555 (Pa. 2009); Henry v . Pittsburgh & Lake Erie R.R. Co., 21 A. 157 (Pa. 1891). The at-will employment doctrine, however, is subject to certain exceptions, including, inter alia , statutory restrictions, judicially-created notions of pu blic policy, and contractual provisions, which may serve as a limitation on the otherwise broad power to terminate the at-will employment relationship. One aspect of a contractual exception to the at-will doctrine, directly at issue in this appeal, is a restrictive covenant not to compete. In the absence of an agreement between an e mployer and employee to the contrary, the law does not prohibit an employee from competing with his former employer after the employee’s service has been termina ted. Morgan’s, 136 A.2d at 844. Non-competition restrictive covenants typically pro hibit competition by a former employee for a specified time within a designated geog raphical area. Such covenants may serve to safeguard an employer’s protectable business interests which may relate to an employee’s special skills; the safeguarding of custom er goodwill; proprietary business information, including processes, trade secrets, a nd inventions; as well as the time and resources the employer has invested in the tra ining of its employees.[J-40-2015] - 12

While a covenant not to compete may be desirable and j ustified in some circumstances on the part of an employer, Pennsylvania cou rts have historically viewed such covenants as contracts in restraint of trade that pre vent a former employee from earning a livelihood, and, therefore, have disfavore d such provisions in the law. See, e.g., Hess v. Gebhard & Co. Inc., 808 A.2d 912, 917 (Pa. 2002); Morgan’s, 136 A.2d at 844. As our Court has explained:

It has long been the rule at common law, that contra cts in restraint of trade made independently of a sale of a business or contract of employment are void as against public pol icy regardless of the valuableness of the consideration exchanged therein. Morgan’s, 136 A.2d at 845. While generally disfavored, Pennsylvania law, however , has recognized the validity and enforceability of covenants not to compete in an employment agreement, assuming adherence to certain requirements. See Pulse Technologies, Inc. v. Notaro, 67 A.3d 778 (Pa. 2013); Morgan’s, 136 A.2d at 844; se e generally Kurt H. Decker, Refining Pennsylvania’s Standard for Invalidating a N on-Competition Restrictive Covenant When an Employee’s Termination is Unrelated to the Employer’s Protectible Business Interest, 104 Dick. L. Rev. 619 (2000). Our Co urt noted in Morgan’s the

evolution of the treatment of restrictive covenants. Such covenants were first found to be absolutely void as against public policy due to a hig h societal demand for, but low supply of, skilled workers. Later, due to the reality o f the new era brought on by the industrial revolution, a more balanced approach was take n by the courts which accepted partial restraints on trade, provided they wer e ancillary to the employment relationship and reasonably limited:

Such general covenants not to compete present centuries old legal problems. The earliest cases were decided aga inst[J-40-2015] - 13 the economic background of a chronic shortage of skilled workers in England, the result of the virulent epidemi cs of the Black Death during the fourteenth century. It was not surprising, then, that all covenants to refrain from pr acticing a trade were held to be void as against public policy. This policy carried over into the early seventeenth century when the grants of exclusive trading privileges by the Sover eign caused widespread public indignation which broadened int o a dislike for all restraints upon the free exercise of tr ade. However, by the eighteenth century England found itse lf in the midst of a new commonercial [sic] era, and adjusting to changed economic conditions, the courts upheld at common law contracts in partial restraint of trade provided th ey were ancillary to a principal transaction, and were reasona bly limited both in geographical extent and duration of time. Morgan’s, 136 A.2d at 844; see also Hess, 808 A.2d at 9 17-18. Consistent with this legal background, currently in Penn sylvania, restrictive covenants are enforceable only if they are: (1) ancilla ry to an employment relationship between an employee and an employer; (2) supported b y adequate consideration; (3) the restrictions are reasonably limited in duration and geographic extent; and (4) the restrictions are designed to protect the legitimate int erests of the employer. Hess, 808 A.2d at 917; Piercing Pagoda, Inc. v. Hoffner, 351 A. 2d 207, 210 (Pa. 1976); Morgan’s,

136 A.2d at 844-46. As with other contracts, for an employment agreement co ntaining a restrictive covenant to be enforced, consideration is crucial, whethe r the covenant is entered into prior to, during, or after employment ends. Thus, to be valid, a covenant not to compete must be consummated with the exchange of consideration. Capital Bakers Inc. v. Townsend, 231 A.2d 292, 293-94 (Pa. 1967) (restrictive covenant in employment contract executed 12 years after the start of employment was unenforceable for lack of consideration). If a noncompetition clause is executed at the inception of the employment, the consideration to support the covenant may be the award of the[J-40-2015] - 14

position itself. Barb-Lee Mobile Frame Co. v. Hoot, 206 A.2d 59, 61 (Pa. 1965); Morgan’s, 136 A.2d at 845 (holding covenant not to co mpete may be enforceable if contained in an employment agreement executed upon th e “taking of employment”). However, a restrictive covenant is not required to be i ncluded in the initial employment

contract to be valid. Jacobson & Co. v. Int’l. Enviro nment Corp., 235 A.2d 612, 618 (Pa. 1967); see generally Jordan Liebman and Richard Nathan , The Enforceability of PostEmployment Noncompetition Agreements Formed After At- Will Employment Has Commenced: The “Afterthought” Agreement, 60 S. Cal . L. Rev. 1465 (1987). There are legitimate reasons for this, including the develop ment of a worker’s expertise, but only after employment for a period of time:

[I]n many instances, . . . the insertion of a restrictiv e covenant in the original contract would serve no valid purpose. An employer who hires a novice has no desire to restrict his present competitive force. Only when the no vice has developed a certain expertise, which could possibly injure the employer if unleashed competitively, will the employer begin to think in terms of the protection of a restrictive covenant. Jacobson & Co., 235 A.2d at 618. When a non-competition clause is required after an emp loyee has commenced his or her employment, it is enforceable only if the e mployee receives “new” and valuable consideration — that is, some corresponding benef it or a favorable change in employment status. See Pulse Technologies, Inc., 67 A.3d at 781-82. Sufficient new and valuable consideration has been found by our court s to include, inter alia , a promotion, 7 a change from part-time to full-time employment, 8 or even a change to a

7 M.S. Jacobs and Assoc., Inc. v. Duffley, 303 A.2d 921, 9 23 (Pa. 1979). 8 Modern Laundry & Dry Cleaning Co. v. Farrer, 536 A .2d 409, 411 (Pa. Super. 1988).[J-40-2015] - 15

compensation package of bonuses, insurance benefits, and s everance benefits. 9 Without new and valuable consideration, a restrictive covenant is unenforceable. Maintenance Specialties Inc. v. Gottus, 314 A.2d 279, 2 81 (Pa. 1974). More specifically, the mere continuation of the employment relationship at the time of entering

into the restrictive covenant is insufficient to serve as co nsideration for the new covenant, despite it being an at-will relationship ter minable by either party. Pulse Technologies, Inc.; George W. Kistler, Inc. v. O’Brien , 347 A.2d 311, 316 (Pa. 1975) (plurality). In sum, while at common law, covenants in restraint of trade have long been disfavored by Pennsylvania courts, an agreement containi ng a non-compete clause will be upheld, if, among other considerations, it is suppor ted by adequate consideration. In the context of requiring an employee to agree to a restrictive covenant mid-employment, however, such a restraint on trade will be enforceable only if new and valuable consideration, beyond mere continued employment, is pro vided and is sufficient to support the restrictive clause. As the interplay between this common law treatment of restrictive covenants and the effect of a statute — here, the UWOA — is at issue, we next turn to the guiding principles set forth in the Statutory Construction Act. 1 Pa.C.S. §§ 1501 et seq. Pursuant to that enactment, the objective of all inter pretation and construction of

statutes is to ascertain and effectuate the intention of the General Assembly. Id. § 1921(a). “The best indication of the legislature’s in tent is the plain language of the statute.” Dorsey v. Redman, 96 A.3d 332, 340 (Pa. 20 14). When considering statutory language, “[w]ords and phrases shall be construed accordi ng to rules of grammar and according to their common and approved usage.” 1 Pa.C .S. § 1903(a). Further, when

9 Davis & Wade, Inc. v. Tripodi, 616 A.2d 1384, 1387 ( Pa. Super. 1992).[J-40-2015] - 16

the words of a statute are clear and unambiguous, ther e is no need to go beyond the plain meaning of the language of the statute “under the pretext of pursuing its spirit.” Id. § 1921(b). Thus, only when the words of a statute are ambiguous should a reviewing court seek to ascertain the intent of the General Assembly through considerations of other factors enumerated in Section 1921(c). Id. § 192 1(c); see generally Bayada Nurses Inc. v. Com. Dept. Labor and Indus., 8 A.3d 866, 880-81 (Pa. 2010). Through certain additional canons of construction, the le gislature has provided further guidance. The General Assembly counsels that it does not intend a result that is absurd, impossible of execution, or unreasonable. 1 Pa. C.S. § 1922. Moreover, the rule that statutes in derogation of the common law are to be strictly construed — ostensibly, so as to not drastically change the existing la w — shall have no application to the statutes of this Commonwealth enacted after Sep tember 1, 1937, id. § 1928(a); thus, stated in the affirmative, and as applied to thi s matter, the UWOA, enacted in 1927, to the degree it is in derogation of the common law, must be strictly construed. 1 Pa.C.S. § 1928(b)(8).

With the common law treatment of restrictive covenants i n employment contracts, as well as the guiding principles of statutory construction , in hand, we turn to consider how an employee’s challenge to the enforcement of an e mployment agreement containing a restrictive covenant not to compete, entere d into after the commencement of employment and without consideration, yet containin g the language “intend[ing] to be legally bound,” is impacted by the UWOA. Initially, we look to the language of the UWOA itself . We note that, by its terms, the UWOA commands that a written promise “shall not be invalid or unenforceable for lack of consideration, if the writing also contains an ad ditional express statement, in any form of language, that the signer intends to be legal ly bound.” 33 P.S. § 6. Our[J-40-2015] - 17

caselaw has explained that, generally, this section provi des that a written agreement will

not be deemed to be void for lack of consideration if i t contains an express statement that the signer intends to be legally bound, Yocca v. P ittsburgh Steelers Sports, Inc., 854 A.2d 425, 433 (Pa. 2004), and, more explicitly, has interpreted this provision to supply the necessary consideration for an agreement. Se e Morgan’s, 136 A.2d at n.12 (parties’ express intention to be legally bound within meaning of UWOA has the same effect in importing consideration as a seal on the agree ment). Mid-Atlantic, however, rejects this interpretation and, as noted above, claims th at the “legally bound” language does not act as a substitute for consideration, but, rath er, bars the signer from challenging the agreement on the basis of a lack of consi deration. In light of the clear and unambiguous language of the UWOA, and consistent with our prior caselaw, we reject Mid-Atlantic’s view an d conclude that a contract containing a written express statement of intent to be “legally bound” supplies the necessary consideration to support the enforceability of an agreement. The UWOA does not speak of extinguishing a cause of action or barr ing a challenge, but, rather, speaks in terms of merits or relief — if the promise is t o be legally binding, the contract

“shall not be invalid or unenforceable for lack of consid eration.” 33 P.S. § 6. Further, even if we were to find the language to be unclear in this regard, while there is no legislative history from our General Assembl y regarding the passage of the UWOA, the history underlying the creation of the unif orm law shows that the drafter of the UWOA, the famed Professor Samuel Williston, specifica lly intended to revive the function of the seal as it formerly existed but without the formality, ritual, and shortcomings associated with seals. Handbook of the Nationa l Conference of Commissioners on Uniform State Laws and Proceedings of th e Thirty-Fifth Annual Meeting (Detroit, Michigan 1925) at 194-97; Amicus Bri ef at 9-10. This being the case,[J-40-2015] - 18

the UWOA was viewed as providing a substitute for the s eal — thus providing consideration — and, consistent with the language of the statute, the lack of actual

consideration would not result in an invalid or unenfo rceable agreement. Therefore, for these reasons, we reject Mid-Atlantic’s interpretation of this statutory provision as prohibiting a signatory to the agreement from challen ging the contract on the basis of a

lack of consideration. Ultimately, however, whether the UWOA provides the n ecessary consideration, akin to the seal, or whether the provision renders an agreement immune from challenge, the practical effect is the same: any party ch allenging the validity of a contract containing an express intent to be legally bou nd will not be entitled to relief from the agreement on the basis that the promises made therein lack consideration. Thus, based solely upon the language of the UWOA, it appears that, despite the lack of consideration, the Agreement would be enforceable agai nst Socko. This is not the end of our analysis, however, as we must take into account the additional considerations found in the General Assembly ’s cannons of statutory construction. Specifically, we must determine if such an interpretation of the statute

leads to an absurd or unreasonable result. 1 Pa.C.S . § 1922. Moreover, in interpreting the legislature’s intentions, we must, according to the dictates of the Statutory Construction Act, strictly construe the UWOA, because it wa s enacted prior to September 1, 1937, and because it is in derogation of the common law mandating that restrictive covenants be supported by actual consideration. 1 Pa.C.S. § 1928(b)(8). We consider whether applying the plain language of th e UWOA, to deny relief to an employee challenging a restrictive covenant on the basis of a lack of consideration, will lead to an unreasonable result. First, as detail ed above, our Commonwealth has a long, and virtually uniform, history of strongly disf avoring covenants in restraint of trade.[J-40-2015] - 19

While beneficial and necessary in some ways to an employ er, our courts have recognized the unique and heavy burden placed upon an employee in attempting to earn a living when subjected to a restrictive covenant. Indeed, contracts containing restrictive covenants are treated as unique in the law, and we find it significant that, even with respect to a contract under seal, an exception was recognized for contracts involving a restraint of trade. Gompers, 56 Pa. at 1 97 (agreement in restraint of trade “is the only exception to the rule, that a contract un der seal imports consideration which a party is not permitted to deny”); see also Newman v. Sablosky, 407 A.2d 448, 451 (Pa. Super. 1979) (“While a seal to an agreement imp orts consideration, the rule is inapplicable in a court of equity [to enforce a restrict ive covenant.]”). Moreover, and

consistent with this sui generis approach to agreements in restraint of trade, our co urts have mandated, in the post-commencement employment sce nario, strict compliance with various requirements, including new and valuable consideration, beyond mere continued employment, to permit enforcement of the re strictive covenant. Related thereto, and as can be drawn from the above discussion, o ur courts aggressively have reviewed the adequacy of consideration supporting such restraints on trade. Upon consideration of the historic background regarding co venants not to compete, their relative positive and negative impact up on the employer-employee relationship, and their unique treatment in the law, including more rigorous scrutiny by our courts, we conclude that a construction of the UWOA w hich would vitiate the need for new and valuable consideration when entering into an agreement containing a restrictive covenant after the initiation of employmen t would be unreasonable. 1 Pa.C.S.A. § 1922. Moreover, our conclusion is buttressed by the narrow construction which must be given to the UWOA. 1 Pa.C.S. § 1928(b) (8). Thus, we hold that an employment agreement containing a restrictive covenant not to compete may be[J-40-2015] - 20

challenged for a lack of consideration even though the agreement, by its express terms, indicates that the parties “intend to be legally bound ” pursuant to the UWOA. The order of the Superior Court is affirmed. Jurisdi ction relinquished. Mr. Chief Justice Saylor and Messrs. Justice Baer and Steve ns join the opinion. Mr. Chief Justice Saylor files a concurring opinion. Mr. Justice Eakin files a dissenting opinion.