Blue Pencil, Contracts, Restrictive Covenants, Non-Compete
A non-solicitation agreement generally means that an employee cannot, after the term of his/her employment, induce his/her former employer’s co-workers to leave, or solicit the former employer’s customers/clients. A non-compete agreement usually means that the ex-employee cannot go work for a competitor, directly or indirectly. A confidentiality agreement refers to an obligation of the ex-employee to keep the employer’s confidential information (including trade secrets, intellectual proper, etc.) private.
Restrictive covenants such as the foregoing undergo close judicial scrutiny. The ordinary rules of contractual construction and enforcement are not necessarily applicable to restrictive covenants. See Continental Research Corp. v. Scholz, 595 S.W.2d 396, 399 (Mo. Ct. App. 1980). As a general matter of principle, restrictive covenants will only be enforced to the extent necessary to protect the employer’s legitimate interests. See Sigma Chemical Co. v. Harris, 794 F.2d 371 (8th Cir. 1986).
Many State courts, in an exercise of their equitable powers, will blue pencil a restrictive covenant, meaning that they will strike out thoe words which go beyond simply protecting the employer, and thus violate public policy as an unreasonable restraint on trade. The blue pencil doctrine, however, is not recognized in Missouri. Missouri Courts take the position that it is either enforceable as written or against public policy; they do not like to re-write the terms of a contract other parties/entities created.
Contacts us with questions related to contracts.