A Missouri non-compete agreement restrains someone from pursuing a line of work to protect a firm that once employed the worker or to protect an interest in a business the person used to own.
Missouri has a state statute that addresses non-solicitation agreements, a type of non-compete. But like most states, most rules governing non-compete agreements are found in court cases.
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Yes, non-compete agreements are typically enforceable in Missouri if they are reasonable, meaning no more restrictive than necessary to protect the employer’s legitimate business interests. (Healthcare Services of the Ozarks, Inc. v. Copeland (2006)).
Two primary interests may be protected by non-compete agreements: good will, including customer lists or contacts, and trade secrets. (Whelan Sec. Co. v. Kennebrew (2012)).
Missouri courts are less strict in deciding whether to enforce a non-compete agreement that is part of the sale of a business than an agreement that is part of an employment contract. (AEE-EMF, Inc. v. Passmore (1995)).
Non-solicitation or “anti-raiding” provisions, which are a type of non-compete agreement prohibiting an employee from luring other employees to join a competitor after leaving a firm, are presumed to be reasonable and thus enforceable when they last for less than a year. The agreements are never enforceable, however, against secretarial or clerical employees. Mo. Ann. Stat. § 431.202.
Partnership, shareholder, or operating agreements and employment contracts that limit a lawyer’s right to practice are not enforceable, except for agreements regarding retirement benefits. Rule 4-5.6(a), Rules Governing the Missouri Bar and the Judiciary.
Case settlements that limit a lawyer’s right to practice are not enforceable. Rule 4-5.6(b), Rules Governing the Missouri Bar and the Judiciary.
The agreement is still potentially enforceable if an employer terminates an employee with cause. If the employee is terminated without cause, a court will decline to enforce the otherwise valid non-compete agreement. (Property Tax Representatives, Inc. v. Chatam (1995)).
The party seeking to enforce a non-compete agreement has the burden of proving its provisions are reasonable. (AEE-EMF, Inc. v. Passmore (1995))
To be enforceable, non-compete agreements that are not included as part of a job offer generally need to contain added benefits, such as increased responsibility or improved salary. Continued employment is presumed to be sufficient consideration for at-will employees to enforce a non-compete agreement. (Computer Sales Intern., Inc. v. Collins (1987)).
The amount of time a non-compete agreement can last depends on other factors, including the geographic area it covers and the type of activity prohibited. (Osage Glass, Inc. v. Donovan (1985)).
There is significant precedent upholding agreements in employment contracts lasting two years. (Whelan Sec. Co. v. Kennebrew (2012)).
In the context of the sale of a business, non-compete agreements lasting five years have been deemed reasonable. (Migar Enterprises, Inc. v. DeMent (1990)).
If a portion of a non-compete agreement is unreasonable, courts may modify and enforce a modified form of the agreement that is reasonable. (Mid-States Paint & Chemical Co. v. Herr (1988)).