A Missouri Non-Compete Agreement is used by employers or businesses to prevent workers from taking employment with a competitor or setting up a competing firm for some time after leaving work in Missouri.
A non-compete agreement can be used to protect trade secrets, confidential business information, customer information, lists, and supplier relationships.
Reasonable Uses and Objections
- Enforceable when terminated without cause? – Yes.
- Employee non-solicitation agreement permitted? – Yes.
- Customer non-solicitation agreements permitted? – Yes.
- Does continuing employment equal sufficient consideration? – Yes.
- Statute of Limitations for breach of contract: 5 years.
Legally Enforceable in Missouri?
Missouri non-compete agreements are enforceable only to the extent necessary to protect trade secrets and customer contacts.
The Missouri courts have laid down the rules under which a non-compete agreement will be upheld. In Healthcare Services of the Ozarks v. Copeland, 198 S.W.3d. 604, (Mo., 2006), the court stated that non-compete agreements must balance between two conflicting interests. Employers need access to a skilled workforce to succeed.
At the same time, the employer must ensure that the workers will not take trade secrets or training and use that information in competition against the former employer after leaving employment.
Employees need to be able to move freely in a free labor market, which includes moving from one employer to another with a constantly increasing pool of skills, leading to progressively higher wages and benefits. The meeting of those two interests results in the ability of employers and employees to make contracts without any illegal restraint of trade.
A non-compete agreement that attempts to reasonably protect the employer’s interests without unduly burdening the worker’s interest will be enforced in Missouri. As a practical matter, this means that a non-compete that protects the employer’s legitimate interests without being more restrictive on the worker may be considered reasonable.
In 2019, 2020, and 2021, legislators in Missouri attempted to eliminate or restrict non-compete agreements. However, this effort did not bear fruit. Certain employees, such as clerks or secretaries, cannot be subjected to non-compete agreements.
Time Limitations
Missouri courts routinely scrutinize agreements to ensure they are reasonable as to time. Courts have generally upheld a one-year limitation as per § 431.202(4). Longer time restrictions are likely to face scrutiny and may or may not be supported depending on the nature of the work performed by the employee.
Two-year bans have been upheld for sales and marketing managers, and a three-year ban on competition has been kept for an agreement involving a company president.
Geographical Limitations
Time restrictions on competition will be examined in conjunction with geographical limits. A small geographical coverage is more likely to be upheld than a wider area. Thus courts have commonly upheld non-compete agreements with geographical radii of between 50 and 150 miles.
Other Limitations
Missouri courts have upheld non-compete agreements banning the solicitation of customers and the use of trade secrets.
Sample
Below, download a Missouri Non-Compete Agreement template in PDF or Word format:
