Missouri Real Estate Lawyer

Missouri non-compete agreements are generally enforceable to the extent necessary to protect the employer’s trade secrets and customers.

However, such protection is balanced with the right of employees to freely work where they choose. Missouri non-compete agreements can generally restrict employees in three ways. First, employees can be denied the right to work for competitors within a certain geographic area. Second, employees can be denied the right to solicit the customers of the employer. Third, employees can be denied the right to solicit the employees of the employer.

Of course, such restrictions are enforceable only if the employee agrees to be bound by them. An employee typically indicates his or her willingness to be bound by such restrictions by signing a non-compete agreement when the employee is hired. The signing of a non-compete agreement is typically a condition of hiring. If the employee won’t sign the non-compete agreement, then the employer won’t hire him or her.

An employer might also require an employee to sign a non-compete agreement as a condition to the continuation of employment or as a condition to a promotion or the providing of a new benefit. As demonstrated in this article Missouri non-compete agreements are typically very restrictive, a fact not usually not realized by the employee until the employment is terminated.

Employees often sign Missouri non-compete agreements without carefully considering their significant consequences. Even when aware of the consequences, employees often overlook them out of concern that the employer might withdraw the job offer if the employee questions the terms. This of course could occur.

However, well advised employers actually encourage prospective employees to retain legal counsel to review the non-compete agreement before signing it. A well written non-compete agreement will even include a paragraph stating that the employer encouraged the employee to seek such advice and that the employer gave the employee sufficient time to consult with legal counsel about the terms of the non-compete agreement. Encouraging the employee to seek such counsel provides some protection to the employer from claims later by the employee that he or she was not given adequate time to review and understand the terms of the non-compete agreement.

If the employer does not actively encourage such review, then the prospective employee should tell the employer that he or she would like to have an attorney review the non-compete agreement. A prospective employer that balks at such a request will probably prove in the long run to not be a good employer. Counsel for the employee will make clear to the employee the ways in which the employee’s earning potential will be restricted if the employment is terminated, and counsel might suggest revisions to the non-compete agreement that might lessen those restrictions.

Suggesting revisions to a non-compete agreement is often easier for an employee when the suggestions are coming from the employee’s attorney rather than from the employee directly. In many cases, the attorney for the employee will negotiate revised terms of a non-compete agreement with the employer’s attorney, which further removes the employee from appearing to directly challenge the employer.

Missouri non-compete agreements often end up in litigation, because the employee did not retain legal counsel to review the non-compete agreement. As such, spending a little upfront for legal counsel can save both the employer and the employee a fortune in legal fees fighting about the non-compete agreement later in court.

Customer Solicitation

Missouri non-compete agreements can generally restrict an employee from soliciting the customers of the former employee. However, such restrictions must be reasonable. Missouri courts generally will not enforce a clause that does not include a geographic limitation. However, Missouri non-compete agreements do not always need to include a geographic limitation. Whether such limitation is required depends on the geographic area where the employee worked and the extent of contact that the employee had with the customers of the employer.

In some circumstances, an employee who works with customers on a nationwide basis could be limited from soliciting customers anywhere within the United States. Similarly, a restriction might be enforceable as to one or more states. A Missouri court has the discretion to narrow the geographic scope of such limitation if the court finds that the limitation in the Missouri non-compete agreement is too broad.

Employee Solicitation

Missouri statute section 431.202 provides that Missouri non-compete agreements that restrict an employee from recruiting or hiring the employees of the employer are enforceable if the purpose is to protect the employer’s trade secrets, confidential business information, customer or supplier relationships, or if the restriction is reasonable and lasts for no more than one year. Such restriction that lasts for more than one year might be enforceable if the restriction is reasonable under the circumstances.

Competition

Finally, Missouri non-compete agreements can prevent an employee, for a reasonable time, from working for a competitor or from otherwise competing with the employer. The geographic limitation related to such restriction must generally not be greater than the employer’s trade area. Missouri courts have supported a three year ban on an operations manager from working for a competitor in the state of Missouri,  a two year ban on an operations manager within 50 miles of where the manager provided services for the employer, a two year ban on a customer service representative limited to a 100 mile radius, a two year ban on a salesperson limited to a 125 mile radius, and a three year ban on a company president limited to a 125 mile radius.

This article is for general informational purposes only, and it is not intended as legal advice. Sewell Law provides experienced representation in real estate, business, and litigation. Please contact Michael Sewell at (314) 942-3232 or at michael@sewelllaw.net to discuss your legal matter. 

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