Missouri Non-Compete Agreement

Introduction

Key Things to Know

1. 1

   A non-compete agreement is a contract in which one party, usually an employee, agrees not to compete with a business for a set time and area after the relationship ends. In Missouri a reasonable employee non-compete is enforceable under common law.

2. 2

   Missouri enforceability rests on common law, not a dedicated non-compete statute. Courts in Missouri generally enforce a covenant only to the extent it is reasonable in time and geography and no broader than necessary to protect the employer's trade secrets or customer contacts, not mere competition. The employer must prove reasonableness.

3. 3

   Missouri has no salary or income threshold that makes a non-compete valid or that exempts a worker. A reasonable covenant can be enforced at any income level. A proposed $75,000 floor (HCS HB 1202) was not enacted, so do not rely on it or import another state's dollar figure.

4. 4

   There is no statutory maximum duration. Courts in Missouri have generally treated post-employment restrictions of up to about two years as reasonable, with geography limited to the area where the employer operates and the employee worked or held customer influence. Longer or broader restraints face greater scrutiny.

5. 5

   Missouri has no advance-notice-before-signing statute for non-competes. On consideration, courts in Missouri generally treat continued at-will employment as enough to support a non-compete an existing employee signs after starting work; a separate new benefit is not strictly required.

6. 6

   Courts in Missouri may modify, or blue-pencil, an overbroad covenant and enforce it as narrowed rather than voiding it, so long as it is not wholly unreasonable (see Whelan Security Co. v. Kennebrew, Mo. banc 2012). Certain RSMo 431.202 covenants signed by employees providing only secretarial or clerical services are carved out of that statute's one-year track.

7. 7

   Because a non-compete must be reasonable and tied to a protectable interest, many Missouri employers also use a confidentiality or non-disclosure agreement and the Missouri Uniform Trade Secrets Act (RSMo Sections 417.450 to 417.467), plus the no-solicit covenants RSMo 431.202 expressly allows, to protect trade secrets and customer data.

Missouri Requirements for Non-Compete Agreement

• Reasonable Non-Competes Are Enforceable

  In Missouri a reasonable employee non-compete is enforceable, but under common law rather than a dedicated statute. Courts in Missouri generally enforce a covenant only to the extent it is reasonable in time and geography and no broader than necessary to protect a legitimate business interest, and the employer bears the burden of proving reasonableness. A covenant that merely stifles competition is not enforceable in Missouri.

• Protectable Interest Required

  A Missouri non-compete must protect a legitimate, protectable interest. Missouri courts generally recognize two: the employer's trade secrets or confidential information, and its customer contacts, meaning the goodwill and customer relationships the employee developed at the employer's expense. A restraint aimed only at preventing ordinary competition, rather than protecting one of these interests, is unlikely to be enforced in Missouri.

• No Salary or Income Threshold

  Missouri has no wage or income threshold that makes a non-compete valid or that exempts lower-paid workers. A reasonable covenant can be enforced at any income level, subject to the common-law reasonableness test. A proposed bill, HCS HB 1202, would have voided non-competes for employees earning $75,000 or less, but it was not enacted. Do not rely on that figure or import another state's dollar threshold for Missouri.

• Reasonable Duration and Geography

  There is no statutory maximum duration. Courts in Missouri have generally treated post-employment restrictions of up to about two years as reasonable, with geography limited to the area where the employer operates and the employee worked or held customer influence. In Whelan Security Co. v. Kennebrew (Mo. banc 2012) a two-year, 50-mile restraint was found reasonable for the employees at issue. Broader or longer restraints face greater scrutiny in Missouri.

• Continued Employment as Consideration

  Missouri has no advance-notice-before-signing statute for non-competes. On consideration, courts in Missouri generally treat continued at-will employment as sufficient to support a non-compete an existing employee signs after starting work, so a separate new benefit is not strictly required. Because this is a fact-specific common-law rule, it is prudent to document the consideration and have new hires sign at the outset.

• Courts May Blue-Pencil Overbroad Covenants

  Courts in Missouri generally have authority to modify, or blue-pencil, an overbroad covenant and enforce it as narrowed rather than voiding it, so long as it is not wholly unreasonable. In Whelan Security Co. v. Kennebrew (Mo. banc 2012) the Missouri Supreme Court narrowed an overbroad non-solicitation clause to the customers the employees had actually dealt with. Missouri courts will not, however, rebuild a wholly unreasonable restraint from scratch.

• Statutory No-Solicit Covenants (RSMo 431.202)

  RSMo Section 431.202 separately authorizes written covenants not to solicit, recruit, or hire employees and covenants protecting confidential information or customer relationships; such a covenant is conclusively presumed reasonable if it lasts no more than one year. That statute expressly does not create or affect the enforceability of employer-employee non-competes (subsection 3), and its one-year track does not apply to employees who provide only secretarial or clerical services.

• Protect Trade Secrets With an NDA Too

  Because a non-compete must be reasonable and tied to a protectable interest, many Missouri employers also use a confidentiality or non-disclosure agreement and the Missouri Uniform Trade Secrets Act (RSMo Sections 417.450 to 417.467), along with the no-solicit covenants RSMo Section 431.202 allows. These tools protect trade secrets and customer data without having to satisfy the full common-law reasonableness test that governs a Missouri non-compete.