Non-Compete agreements have always been around, but it seems that they have come to the forefront in recent years. The purpose of a non-compete agreement is to protect an employer from unfair competition. Missouri law, then, balances the interest in having robust commercial activity against the interest of employers being subjected to an uneven playing field by working against competitors who have insight into how the other works from a former employee. In balancing these interests, Missouri law sets forth two legitimate interests employers may reasonably protect in non-compete agreements: customer contacts and trade secrets.
To summarize —
Contracts in restraint of trade are generally unlawful. See Mo. Rev. Stat. § 416.031. A non-compete contract, then, will only be enforced when it is reasonably necessary to protect narrowly defined and well-recognized employer interests. Services of the Ozarks, Inc. v. Copeland, 198 S.W.3d 604, 610 (Mo. 2006). Employers have an interest in being protected against “unfair competition.” Washington County Mem. Hosp. v. Sidebottom, 7 S.W.3d 542, 545 (Mo. App. E.D. 1999) Under Missouri law, the two interests an employer may protect to prevent unfair competition are trade secrets and customer contacts. Mid-States Paint & Chemical Co. v. Herr, 746 S.W.2d 316, 617 (Mo. App. E.D. 1988). A customer is one who repeatedly has business dealings with a particular tradesman or business. Payroll Advance, Inc. v. Yates, 270 S.W.3d 428, 434-35 (Mo.App.S.D.2008). Trade secrets consist of technical or nontechnical data, a formula, pattern, compilation, program, device, method, technique, or process that derives independent economic value, actual or potential, from not being generally known to, and not being readily ascertainable by proper means by other persons who can obtain economic value from its disclosure or use. Lyn-Flex West, Inc. v. Dieckhaus, 24 S.W.3d 693, 697-98 (Mo. App. E.D. 1999).
An employer cannot take unfettered steps to protect these interests. Indeed, the protection must be concrete and narrowly defined. Something is concretely defined if it is not vague or ambiguous; something is narrowly defined if it is limited geographically and temporally.
As you can see, analyzing non-compete agreements is difficult because the analysis largely depends on the circumstances. Thus, if you are an employer or employee who has a pressing issue concerning a non-compete agreement, contact us today for a free consultation.