Non-Compete Agreements and Unfair Competition — An Updated Overview

Michael B. Kass INTRODUCTION Contracts are enforceable, right? Not always, at least not when it comes to non-compete agreements. Indeed, employers and their employees often have misconceptions about the enforceability of restrictive covenants. The employer is often convinced of its ability to enforce the agreement to prevent its employee from competing, while the employee often believes that the restrictions are so stifling that they would never be enforced against him. In other words, one of the parties to a non-compete agreement often has a false perception with respect to his rights or obligations. Employees must be aware that Missouri courts enforce non-compete agreements to protect an employer from unfair competition by a former employee. However, employers must also be aware that a court will not enforce such agreements merely to protect the former employer from competition. The enforcement of non-compete agreements is restricted. Non-compete agreements are enforceable only to the extent that they are “reasonably necessary to protect narrowly defined and well-recognized employer interests.” Over the past decade, there has been a marked increase of employers’ use of noncompete agreements, which has led to a corresponding increase in litigation over them. In fact, since the publication of Non-Compete Agreements – An Overview, in the May-June 1998 edition of The Journal of The Missouri Bar, at least a dozen Missouri appellate and federal court decisions have been reported addressing restrictive covenants. This article is intended to provide a comprehensive overview and update of this area of the law.