Non-competes are a “restraint of trade” that are generally prohibited by Missouri law. However, they can be enforceable under certain circumstances and when they are reasonable.
Before you quit your job and launch into that new business – you should talk to a lawyer about any non-compete agreement you signed. A summary of the analysis for a non-compete is described here – but this is general guidance only, and not intended as legal advice.
To be enforceable, the restriction must be reasonably necessary to protect the employer’s legitimate interest in trade secrets and/or customer contacts.
To evaluate the circumstances, courts consider:
The non-compete’s subject matter and purpose.
The situation of the parties.
The specialization of the business involved.
Any consideration given to the employee for the non-compete.
Risk to the employer if the non-compete were unenforced.
Economic hardship on the employee.
Whether the covenant is harmful to the public.
The restriction must be reasonable in duration and scope.
There are no bright lines regarding duration; although one to three years tends to be the range.
Scope generally refers to geographic scope; although clauses without a geographical limitation can be enforced if the scope is limited to customers.
For more information, email us and request our Client Guide “Restrictive Covenants in Missouri”.
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