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Non-Solicitation Agreements & Contracts

Restrictive convenants — non-compete agreements, non-solicitation, agreements, etc. — are typically only valid to the extent they protect legitimate employer interests. An employer has a legitimate interest in customer contacts because “the influence an employee acquires over his employer’s customers through personal contact.” Scchmersahl, Treloar & Co. v. McHugh, 28 S.W.3d 345, 349 (Mo. Ct. App. 2000). A “customer” is one who repeatedly has business dealings with a particular tradesman or business. Silvers, Ashwer, Sher & McLaren, M.D.s Neurology, P.C. v. Batchu, 16 S.W.3d 340, 345 (Mo. Ct. App. 2000).  While restrictive covenants must usually be narrowly tailored in temporal and geographic scope, courts have enforced customer non-solicitation clauses without a geographic limitation when other limitations to the prohibited conduct exist or when the employee had significant contact with a substantial number of the employer’s customers. Whelan Sec. Co. v. Kennebrew, 379 S.W.3d 835, 843 (Mo. 2012).

Section 431.020, RSMo outlines, in relevant part, the extent to which non-solicitation clauses are enforceable:

1. A reasonable covenant in writing promising not to solicit, recruit, hire or otherwise interfere with the employment of one or more employees shall be enforceable and not a restraint of trade pursuant to subsection 1 of section 416.031, RSMo, if:

. . .

(3) Between an employer and one or more employees seeking on the part of the employer to protect:

(a) Confidential or trade secret business information; or

(b) Customer or supplier relationships, goodwill or loyalty, which shall be deemed to be among the protectable interests of the employer; or

Based on the foregoing standards, it is important to scrutinize whether the purpose of a non-solicitation clause is motivated by a legitimate attempt to protect confidential information or customer/supplier information. Because restrictive covenants are evaluated on a case-by-case basis, it is important to have legal counsel review and analyze the specifics of the agreement and the context in which it was executed.

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