Non-compete agreements are often used by employers or businesses to prevent workers from taking employment with a competitor or setting up a competing firm for a period of time after leaving work. Non-compete agreements are allowed in Missouri. Courts will enforce non-compete agreements which are reasonably drawn to protect the interest of the employer, and in securing the right of employees to pursue work in an open labor market.
Is a Non-Compete Agreement Legally Enforceable in Missouri?
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. [1] Employers need access to a skilled pool of workers to be successful. At the same time, the employer needs to 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 the ability to move 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.
In Missouri, a non-compete agreement that attempts to reasonably protect the interests of the employer, without unduly burdening the interest of the worker will be enforced. As a practical matter this means that an agreement that protects the legitimate interests of the employer, 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 types of employees, such as clerks or secretaries, cannot be subjected to non-compete agreements.
What Can Be Protected?
In Missouri, a non-compete agreement can be used to protect trade secrets, confidential business information, customer information, and lists and supplier relationships. It can also be used to protect and promote business goodwill and loyalty, prevent unfair competition, and promote stability in the workforce by restricting the ability of workers to work for competitors for a period of time after leaving employment.
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
Missouri Non-Compete Limitations
Time limitations:
Missouri courts routinely scrutinize agreements to ensure they are reasonable as to time. Courts have generally upheld a one-year limitation. [2] Longer time restrictions are likely to face scrutiny, and may or may not be upheld 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 upheld for an agreement involving a company president.
Non-Compete Missouri Geographical limitations:
Time restrictions on competition will be examined in conjunction with geographical restrictions. A small geographical coverage for the agreement 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 solicitation of customers and use of trade secrets.
Missouri Non-Compete Agreement Sample
This example of a Missouri non-compete agreement will let you draft up-to-date agreements for your business clearly, simply, and inexpensively.
Non-Compete Agreement
