Non-Compete Agreements -- An Overview

Synopsis: Missouri courts enforce non-compete agreements to protect an employer from unfair competition by a former employee. However, a court will not enforce such a covenant merely to protect the former employer from competition. The enforcement of non-compete agreements is carefully restricted. They are enforceable only if a legitimate protectable interest of the employer is served.

I. Introduction

Unlike most professional sports, in many industries today employees do not have the right to be unrestricted free agents. For many businesses, profit margins are shrinking and competition is fierce; as a result, management wants to protect the business from key employees who leave to compete against them. On the other hand, successful employees are often in high demand and want the option to work for the highest bidder, or the employee wants to start his or her own business and compete directly against the former employer. Thus, because of today's business climate, the use of non-compete agreements has increased.

With the increased use of these agreements, there is a corresponding increase in litigation over them. Frequently, the former employer files suit against the former employee for monetary damages and injunctive relief, including a request for a temporary restraining order (TRO). The new employer is also often sued.

Once suit is filed, the parties are usually off to the races. The employee may only receive a few hours' notice of the former employer's intention to go to court to seek a TRO. After the hearing on the TRO, a preliminary injunction hearing will generally be held within 10 to 20 days. During that time, depositions of the former employer, former employee and the new employer are usually taken and confidential documents are produced (often subject to a protective order). Typically, these cases are on a very fast track, involve a substantial amount of time, and sensitive business information is discovered.

There is often litigation because the economic stakes are high. From the former employer's perspective, the employee may have significant customer contacts or confidential information, and the former employee could cause significant losses to the former employer. For the new employer, the person hired may be a valuable addition to its team and its bottom line. For the former employee, the enforcement of the agreement may put him or her out of work.

There has been a number of appellate decisions since the Supreme Court of Missouri last decided a non-compete case twelve years ago.1 This article is intended to provide a comprehensive overview and update of this area of the law.

II. Purpose of Non-Competes

The purpose of enforcing a non-compete agreement "is to protect an employer from unfair competition by a former employee without imposing unreasonable restraint on the later."2 "Protection of the employer, not punishment of the employee, is the essence of the law."3 "An employer cannot extract a restrictive covenant from an employee merely to protect himself from competition."4 The Supreme Court of Missouri has stated that "[a]greements of this kind restrain commerce and limit the employee's freedom to pursue his or her trade." Therefore, "enforcement of such . . . agreements is carefully restricted."5 "[T]hey are enforceable only if a legitimate protectable interest of the employer is served."6

"An employer has a protectable interests . . . in trade secrets and customer contacts."7 Thus, these two interests generally represent the heart of the litigation over a non-compete agreement. The former employee will argue that the former employer's information is not a trade secret or confidential, but rather that it is generally known in the industry. With respect to customers, his arguments may include that the customer was not his customer or is not a current customer or that his customer contacts are not sufficient to justify enforcement of the non-compete. The former employer obviously argues to the contrary. As a result, the court, in deciding whether to issue injunctive relief, must sort out these two interests.

Since trade secrets and customer contacts are protectable interests, how have they been defined in Missouri?

A. What is a Trade Secret?

Trade secrets have been defined as follows:

[A]ny formula, pattern, device or compilation of information which is used in one's business, and which gives him an opportunity to obtain an advantage over competitors who do not know or use it. It may be a formula for a chemical compound, a process of manufacturing, treating or preserving materials, a pattern for a machine or other device, or a list of customers.8

"Trade secrets may include a list of customers and a code for determining discounts, rebates or other concessions in a price list or catalogue."9 "Matters of public knowledge or of general knowledge in an industry are not trade secrets."10 Whether the former employer's purported confidential information or trade secrets (i.e. prices, profit margins, and customer names and contacts) are, in fact, secret or whether they are generally known within the industry must be analyzed on a case by case basis.

Furthermore, Missouri has adopted the Uniform Trade Secret Act. This act became effective on August 28, 1995. The Missouri Uniform Trade Secret Act (MUTSA) defines a trade secret as follows:

[I]nformation, including but not limited to, technical or nontechnical data, a formula, pattern, compilation, program, device, method, technique, or process that:

(a) 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; and

(b) Is the subject of efforts that are reasonable under the circumstances to maintain its secrecy.11

Courts from other jurisdictions which have also enacted the act have found that when customer lists and customer information are not readily ascertainable by proper means, and if reasonable efforts were used to keep them secret, such customer information is entitled to protection under the act.12 While a discussion of the MUTSA is beyond the scope of this article, it may provide certain protections to companies when an employee, with or without a non-compete agreement, competes against his former employer. Thus, counsel should consult the MUTSA in formulating legal strategies.

B. Who is a Customer?

"A customer . . . is one who repeatedly has business dealings with a particular [salesperson] or business."13 The proponent of a restrictive covenant must have "a group of customers who regularly patronize the business of the particular employer [otherwise], there can be no stock of customers and no protectable interest."14 If the customers only use the employer's services on a single occasion or there is little repeat business, the employer does not have a stock of customers and there is no protectable interest.15

[I]n the sales industry the goodwill of a customer frequently attaches to the employer's sales representative personally; the employer's product becomes associated in the customer's mind with that representative. The sales employee is thus frequently in a position to exert a special influence over the customer and entice that customer's business away from the employer. An employer may properly protect itself against such an eventuality for a reasonable period of time. Because it is this special influence that justifies enforcement of non-compete covenants, the quality, frequency and duration of employee's exposure to the customers is of crucial importance in determining the reasonableness of the restriction.16

In West Group Broadcasting, Ltd. v. Bell,17 the court held that a radio station failed to prove that it had a legitimate protectable interest in preventing its former "broadcast personality" from working for a competing radio station. The Bell court based its decision on the facts that the announcer changed her radio name, the format of her show and the time of her show (from evenings to mornings). The court stated that the radio station's argument that her voice was very recognizable and her fans could go from one station to another was not evidence of customer lists or influence.18

In summary, when deciding whether to enforce a non-compete agreement, the court attempts to balance the equities of protecting the former employer while not putting the former employee out of work. Because the stakes can be high, it is common for the parties to become very emotional during the litigation over the enforcement of the non-compete agreement. In fact, these lawsuits are sometimes similar to a divorce, particularly when the employee was a key salesperson or officer. Thus, alternative dispute resolution, particularly mediation, is often a very effective means to resolve these disputes.

III. Termination With or Without Cause

One of the first issues that counsel must attempt to resolve in these cases is whether the employee's employment was terminated with or without cause. Based on recent Missouri cases, it has become the general rule that if the employer discharged an employee without cause, a court of equity will refuse to order injunctive relief to enforce the employee's non-compete.19 Therefore, whether the employer had cause to discharge the employee is an important issue to consider.

What is cause? The term cause or sufficient cause that justifies the dismissal of an employee has not been specifically defined in Missouri.20 The case that provides the most detailed discussion of the definition of cause in the context of non-compete cases is Superior Gear Box. The Superior Gear Box court stated that insubordination, incompetence or negligence are grounds for discharge for cause.21

No Missouri court has yet to hold that termination without cause will always result in a court's refusal to enforce a covenant not-to-compete. Sometimes, the reasons why an employee was terminated and whether the termination was for cause are murky. Counsel's best guidance to determine whether the termination was for cause is the definition set forth in Superior Gear Box.

Finally, it is also important to recognize that a non-solicitation provision in a covenant not-to-compete may well be enforceable, even if the termination is without cause. In other words, a covenant not-to-compete often has both a non-compete provision (which prohibits the employee from competing against a former employer) and a non-solicitation provision (which prohibits the employee from soliciting the former employer's customers). In Chatam, the court stated that a non-solicitation provision stands on a different footing than the non-competition provision. The Chatam Court went on to state that this provision was still enforceable even though the employee was terminated without cause.22

Therefore, when counsel is consulted about the enforcement of a non-compete, counsel should first try to determine whether the employee was terminated with or without cause and, if the employee was terminated without cause, then determine whether the covenant contains a non-solicitation provision (most well-drafted non-competes include both provisions).

IV. Modifying the Non-Compete

Simply because a covenant contains unreasonably broad geographical and time restrictions does not mean that it is unenforceable. Under Missouri law, rather than invalidating a broad non-compete, a court will modify those restrictions.23 Again, the court is concerned about protecting an employer from unfair competition by a former employee but does not want to impose unreasonable restrictions on the employee.

Examples of how Missouri courts have modified non-competes are set forth below. In Superior Gearbox, a former executive and shareholder's non-compete was modified from 10 years to five years.24 In Orchard Container, the geographical restriction in a former president's non-compete was reduced from a 200-mile radius from St. Louis to a 125-mile radius.25 In Mid-States Paint, a former salesman's non-compete was reduced from three years to two years and from a 350-mile radius from the company's headquarters in Crestwood, Missouri, to a 125-mile radius.26

V. When Does Injunctive Relief Begin?

Most non-competes provide that the employee cannot compete for a period of time (i.e. one year) from the date that the employment is terminated. It is well-settled under Missouri law that when an injunction is imposed, the injunction period begins on the date the employment is terminated.27 This is true even when the injunction period has either expired or is about to expire by the time the appellate court makes its ruling.28

The only Missouri case in which a trial court or an appeals court ordered an injunction against competition to begin on the date the court entered the injunction is Southwest Pump & Machinery Co. v. Forslund.29 However, the trial court in Forslund issued an injunction less than a month after the defendant resigned his position as president of the plaintiff company and the defendant was still a member of the plaintiff's board of directors at the time of the injunction. Thus, as the court pointed out in Superior Gearbox, Forslund is distinguishable because the span of time between defendant's resignation and the issuance of the injunction was very short, and the court was fashioning a remedy based on the fiduciary duties of a sitting company director, not enforcing the terms of a non-competition agreement.30

VI. The New Employer's Exposure

The former employer often files suit against its former employee and the new employer. There are a number of strategic considerations concerning whether the new employer should be sued at the outset of the litigation, added at a later time or sued at all. Those strategic considerations vary on a case by case basis. However, there are a number of theories of recovery that the new employer is exposed to -- civil conspiracy, tortious interference with a contract or business expectancy, and unfair competition or head start.

In Chatam, the court held that a cause of action was stated against the new employer for civil conspiracy. "A civil conspiracy is proved by evidence that two or more persons have an agreement or understanding to do an unlawful act, and that, in pursuance of this agreement or understanding, they proceed to carry out their unlawful purpose to the damage of the plaintiff . . . [T]his principle was applied where the unlawful act was the breach of a" former employee's non-compete and the co-conspirators were the plaintiff's former employee and his new employer.31 Moreover, the new employer must know of the non-competition agreement. The new employer's good faith belief that the non-compete agreement is unenforceable is not a defense to a civil conspiracy claim for damages.32

In addition to being exposed for damages for the lost profits of the former employer's customers, the new employer may also be liable for the attorney's fees incurred by the former employer to enforce the non-compete. Where one tortiously induces another to breach a contract, it stands to reason that the harmed party may, in an action against the tortfeasor, recover attorney's fees incurred in prosecuting an action for damages or specific performance against the breaching party.33 In other words, if the new employer did not interfere, there would not have been litigation between the former employer and employee. This doctrine is known as the collateral litigation exception to the general rule that attorney's fees are only recoverable in Missouri when provided for by a contract or statute.34

In summary, when a new employer is considering hiring someone who has a covenant not-to-compete, serious consideration should be given to the new employer's exposure in hiring the employee, particularly if the goal is to have the employee solicit customers of the former employer.

VII. Defenses to Non-Competes³⁵

The best defense in attacking the enforceability of a non-compete agreement is often the argument that the former employer does not have a legitimate protectable interest, namely, trade secrets or customer contacts. However, depending on the case, the four defenses set forth below may also have merit.

A. Waiver

One of the defenses often raised to the enforcement of a non-compete agreement is that the former employer has not enforced the non-compete agreement in the past against other employees and has thus waived its enforceability. The success of this defense is fact specific. It will depend largely on the number and recency of the past instances of failing to enforce the non-compete and whether the other employees had the same type of job as the employee at issue.

Moreover, the employer's failure to enforce the non-compete against other employees does not necessarily mean it is unenforceable. In Thompson v. Allain, the court held that the fact that the employer did not enforce the covenant as to other employees did not amount to a waiver as to a different employee. The Thompson court stated that the employer may have had good reasons for not objecting to having former employees compete with it in certain circumstances.36

B. Unclean Hands

"A court of equity will not aid a party who resorts to unjust and unfair conduct."37 In Gold v. Holiday Rent-a-Car Int'l, Inc., a franchisee attempted to prevent a franchisor from enforcing a non-compete agreement.38 The franchisee developed a scheme to absolve himself of his contractual obligations by alleging fraudulent inducement of his entry into the franchise agreement.39 Before this strategy could be implemented, the franchisor attempted to enforce the non-compete clause after discovering the franchisee had entered into a contract with a competitor and started operating a competing business from his original site. Before quickly analyzing and dismissing his claim of fraud, the court explained in detail the harm the franchisee caused to the franchisor as a result of his improper actions.40 While some of the franchisee's claims may have had merit, the court's statement of the franchisee's improper action in two separate parts of its opinion strongly supports the conclusion that the franchisee's "unclean hands" influenced its determination.

C. Prior Material Breach

The key issue with respect to this defense is whether a prior breach of the agreement is material. The materiality of the breach is usually a question of fact.41

In McKnight v. Midwest Eye Institute of Kansas City, Inc., when an employer and physician could not agree on new contract terms before the expiration of an existing contract, the employer cancelled all of the physician's scheduled duties and notified all of his patients that he would no longer be practicing in the area.42 The McKnight court found that this conduct violated the duty of good faith and fair dealing because both parties had a duty to cooperate to obtain the benefits they both reasonably expected.43 Therefore, the court did not enforce the non-compete clause because this conduct constituted a material breach of the contract.44

A similar situation arose in a contract renegotiation dispute between a salesman and his employer in Luketich v. Goedecke, Wood & Co., Inc.45 The original contract stated that changes to the employment contract must be mutually agreed upon. However, the employer unilaterally changed the compensation structure because of its dissatisfaction with certain aspects of the employee's performance.46 The Luketich court concluded that the unilateral changes in compensation constituted a material breach and refused to enforce the non-compete clause.47

Similarly, in Forms Mfg., Inc. v. Edwards, the company and the salesperson entered into a contract with a non-compete clause and other clauses defining how the company would pay commissions.48 The employer refused to pay more than the minimum commission even though the employee's sales justified larger payments. The employer also unilaterally increased the amount deducted from commissions for payment of expenses. The employee ultimately resigned and formed a competing company, at which time the former employer attempted to enforce the non-compete clause.49 The court found that the unilateral change in the compensation structure and the retention of commissions amounted to a material breach of the contract and therefore would not enforce the non-compete agreement.50

Smith-Scharff Paper Co., Inc. v. Blum also involved a unilateral change to a compensation structure.51 In Smith-Scharff, the company unilaterally switched the employee's compensation from straight salary to commission when it could not do so under the contract.52 The employee then joined a competitor, at which time the former employer attempted to enforce the non-compete clause.53 The court found that the employee had entered into the contract with a non-compete clause based on the assurance of a minimum salary until he reached some level of success. As a result, the court found the change by the employer to be a material breach of the contract and therefore did not enforce the non-compete provision in the contract.54

The employee, as well as the employer, must take care not to materially breach the contract or else be at risk of losing possible defenses. In Adrian N. Baker & Co. v. Demartino, an employee attempted to prevent the enforcement of a non-compete agreement after his termination.55 He claimed that the employer breached the contract because of improper commission payments. However, the court found that the employee was the first to materially breach the contract and that the employer, in fact, had good cause to discharge the employee. Because the employer did not materially breach the contract prior to the employee's breach, the court enforced the non-compete agreement using an "unclean hands" analogy.56

D. Lack of Consideration

A court will not enforce a non-compete clause if there is no consideration for it.57 However, Missouri courts have held that continued employment is a sufficient basis to support a finding of consideration.58 Therefore, it is rare that this defense is successful.

In Nail Boutique, Inc. v. Church, the employee signed the employment contract with a non-compete clause at the beginning of her employment.59 After the employee resigned and joined a competitor, the employer sought enforcement of the non-compete clause. The employee contended that consideration was lacking because the non-compete clause made her ability to resign at will worthless, thus creating a unilateral contract where all of the benefits flowed to the employer.60 The court enforced the non-compete clause because it found that the employee received "adequate consideration" by working for two and a half years while receiving training and the contractual compensation.61

As stated above, courts have found that continued employment is sufficient consideration where the agreement was signed after the commencement of employment.62 In Computer Sales Int'l, while the employee did not sign the non-compete covenant at the inception of his employment, he neither objected to the covenant nor told the employer that he would not sign it, when over a year later, the employer discovered this oversight and obtained the employee's signature on the non-compete clause. The employer sought enforcement of the non-compete clause when the employee resigned and started working for a competitor.63 The court held that the continued employment constituted sufficient consideration and that the employee was estopped from denying the covenant's validity because of his acceptance of the benefits that flowed from employment.64

VIII. Miscellaneous Issues

A covenant not to compete is enforceable against an independent contractor. For instance, a non-compete has been enforced against a physician who had an independent contractor relationship with a medical clinic.65

Moreover, a non-compete may be enforced against a salesperson who worked for the former employer for a short time (i.e. 10 months) and whose performance was average to below average.66

Finally, "[t]here is relatively little Missouri case law concerning the elements required to obtain a preliminary injunction . . ." because preliminary injunctions "are interlocutory and generally not appealable."67 However, it is well-established that when considering a motion for a preliminary injunction, a court should weigh "the movant's probability of success on the merits, the threat of irreparable harm to the movant absent the injunction, the balance between this harm and the injury that the injunction's issuance would inflict on other interested parties, and the public interest."68

IX. Conclusion

A Missouri court will enforce a non-compete to protect a former employer from unfair competition. However, a court will also try not to impose unreasonable restraints on the former employee. Thus, the court attempts to balance the equities between the two parties. In balancing the respective equities, the court will determine whether there are trade secrets or customer contacts that should be protected.

Endnotes

1 Osage Glass, Inc. v. Donovan, 693 S.W.2d 71 (Mo. banc 1985).

2 Superior Gearbox Co. v. Edwards, 869 S.W.2d 239, 247 (Mo. App. S.D. 1993), quoting Continental Research Corp. v. Scholz, 595 S.W.2d 396, 400 (Mo. App. E.D. 1980).

3 Superior Gearbox, 869 S.W.2d at 239, quoting Continental Research, 595 S.W.2d at 400.

4 Steamatic of Kansas City, Inc. v. Rhea, 763 S.W.2d 190 (Mo. App. W.D. 1988); West Group Broadcasting, Ltd. v. Bell, 942 S.W.2d 934, 937 (Mo. App. S.D. 1997).

5 Osage Glass, 693 S.W.2d at 73-74, citing Orchard Container Corp. v. Orchard, 601 S.W.2d 299, 303 (Mo. App. E.D. 1980).

6 West Group Broadcasting, Ltd., 942 S.W.2d at 937.

7 Superior Gearbox, 869 S.W.2d at 247-48, citing Mid-States Paint & Chemical Co. v. Herr, 746 S.W.2d 613, 617 (Mo. App. E.D. 1988); Continental Research, 595 S.W.2d at 400.

8 National Rejectors, Inc. v. Trieman, 409 S.W.2d 1, 18-19 (Mo. banc 1966), citing Restatement of Torts § 575. See also Cape Mobile Home Mart, Inc. v. Mobley, 780 S.W.2d 116, 118 (Mo. App. E.D. 1989); Mid-States Paint, 746 S.W.2d at 618.

9 Id.

10 Rhea, 763 S.W.2d at 194 citing National Rejectors, 409 S.W.2d at 18-19.

11 Section 417.453(4), RSMo Supp. 1997.

12 Gillis Associated Indus. v. Cari-All, Inc., 564 N.E.2d 881 (Ill. App. Ct. 1990); R & D Business Systems v. Xerox Corp., 152 F.R.D. 195 (D. Colo. 1993); Courtesy Temporary Service v. Camacho, 272 Cal. Rptr. 352 (Cal. App. 2nd 1990); Minuteman, Inc. v. L. D. Alexander, 434 N.W.2d 773 (Wis. 1989); Centrol, Inc. v. Morrow, 489 N.W.2d 890 (S.D. 1992); and NCH Corp. v. Broyles, 551 F. Supp. 636, 638 (E.D. La. 1982).

13 Rhea, 763 S.W.2d at 192, citing Empire Gas Corp. v. Graham, 654 S.W.2d 329, 330-331 (Mo. App. W.D. 1993).

14 Rhea, 763 S.W.2d at 192.

15 Rhea, 763 S.W.2d at 192; Ibur & Assocs. Adjustment Co. v. Walsh, 595 S.W.2d 33 (Mo. App. E.D. 1980).

16 Superior Gearbox, 869 S.W.2d at 248, quoting Continental Research, 595 S.W.2d at 401.

17 942 S.W.2d 934 (Mo. App. S.D. 1997).

18 Id. at 937.

19 Property Tax Representatives v. Chatam, 891 S.W.2d 153, 156 (Mo. App. W.D. 1995); Superior Gearbox, 869 S.W.2d at 244; and Showe-Time Video Rentals, Inc. v. Douglas, 727 S.W.2d 426, 431 (Mo. App. S.D. 1987).

20 Chatam, 891 S.W.2d at 156; Superior Gearbox, 869 S.W.2d at 244.

21 869 S.W.2d at 244.

22 Chatam, 891 S.W.2d at 158.

23 Superior Gearbox, 869 S.W.2d at 239; Mid-States Paint, 746 S.W.2d at 616; and Orchard Container, 601 S.W.2d at 303-04.

24 869 S.W.2d at 248.

25 601 S.W.2d at 303-04.

26 746 S.W.2d at 615, 617.

27 Superior Gearbox, 869 S.W.2d at 246, citing Osage Glass, 693 S.W.2d at 71; Nail Boutique, Inc. v. Church, 758 S.W.2d 206 (Mo. App. S.D. 1988); and Mills v. Murray, 472 S.W.2d 6 (Mo. App. W.D. 1971).

28 Superior Gearbox, 869 S.W.2d at 246; Willman v. Beheler, 499 S.W.2d 770 (Mo. 1983).

29 225 Mo. App. 262, 29 S.W.2d 165 (1930).

30 Superior Gearbox, 869 S.W.2d at 246.

31 891 S.W.2d at 159; Mills, 472 S.W.2d at 12-13.

32 891 S.W.2d at 159.

33 Phil Crowley Steel Corp. v. Sharon Steel Corp., 536 F.Supp. 429, 431 (E.D. Mo. 1982), aff'd, 702 F.2d 719 (8th Cir. 1983).

34 Phil Crowley, 536 F. Supp. at 431; 702 F.2d at 721.

35 The author would like to thank Steven E. Pozaric, a third year law student at St. Louis University and summer associate at Armstrong, Teasdale, Schlafly & Davis, who assisted in drafting this section of the article.

36 377 S.W.2d 465, 468 (Mo. App. W.D. 1964).

37 McKnight v. Midwest Eye Institute, 799 S.W.2d 909, 917 (Mo. App. W.D. 1990), citing Showe-Time Video Rentals, 727 S.W.2d at 430.

38 627 F. Supp. 280, 281 (W.D. Mo. 1985).

39 Id. at 281-82.

40 Id. at 283.

41 Shelbina Veterinary Clinic v. Holthaus, 892 S.W.2d 803, 805 (Mo. App. E. D. 1995), citing McKnight, 799 S.W.2d at 915.

42 McKnight, 799 S.W.2d at 911-12.

43 Id. at 916, citing Morton v. Hearst Corp., 779 S.W.2d 268, 273 (Mo. App. W.D. 1989). The benefits expected by the employee included contractually guaranteed performance-based compensation as well as vacation on mutually agreeable terms. McKnight, 799 S.W.2d at 916.

44 Id. at 915-17.

45 835 S.W.2d 504 (Mo. App. E.D. 1992).

46 Id. at 506.

47 Id. at 507. The employer argued that the employee's performance difficulties constituted a material breach occurring prior to its breach which prevented the employee from seeking a remedy in this situation. Id. at 508. However, the court deferred to the trial court's finding of non-materiality of the employee's breach because the employment contract was silent on the specific issues of performance in question. Luketich, 835 S.W.2d at 508.

48 705 S.W.2d 67, 69 (Mo. App. E.D. 1985).

49 Id. at 69.

50 Id. at 69-70. The court noted these violations "rose to the level of unclean hands." Id. at 70. The employer also argued that by continuing to work, the employee in effect waived the breach by acquiescing to the changes. The court stated the company had not met its burden to prove waiver and the employee's vocal opposition and limited duration of continued employment prevented a finding of waiver. Id.

51 813 S.W.2d 27 (Mo. App. E.D. 1991).

52 Id. at 28.

53 Id. at 27-28.

54 Id. at 29.

55 733 S.W.2d 14, 15 (Mo. App. E.D. 1987).

56 Id. at 17-18.

57 Nail Boutique, Inc. v. Church, 758 S.W.2d 206, 209 (Mo. App. S.D. 1988).

58 Computer Sales Int'l, Inc. v. Collins, 723 S.W.2d 450, 452 (Mo. App. E.D. 1986), citing Reed, Roberts Assocs., Inc. v. Bailenson, 537 S.W.2d 238, 241, (Mo. App. E. D. 1976).

59 758 S.W.2d at 208.

60 Id. at 209.

61 Id. at 210.

62 Computer Sales Int'l, Inc. v. Collins, 723 S.W.2d 450 (Mo. App. E. D. 1966).

63 Id. at 451.

64 Id. at 452. The court distinguished Ranch Hand Foods v. Polar Pak Foods, Inc., 690 S.W.2d 437 (Mo. App. W. D. 1985), on which Collins attempted to rely upon because the original contract in Ranch Hand did not contain the restrictive covenant but was included later by the employer. Computer Sales Int'l, 723 S.W.2d at 452. In addition, the court interpreted Ranch Hand as stating continued employment itself provides sufficient consideration, as does "evidence of promotions, increased responsibilities and improved compensation." Id.

65 Renal Treatment Ctrs. - Mo., Inc. v. Braxton, 945 S.W.2d 557 (Mo. App. E.D. 1997).

66 Cape Mobile Home Mart, Inc., 780 S.W.2d at 116.

67 State v. Gabbert, 925 S.W.2d 838, 839 (Mo. banc 1996); State ex rel. Myers Memorial v. Carthage, 951 S.W.2d 347, 351 (Mo. App. S.D. 1997).

68 Id., citing Pottgen v. Missouri State High School Activities Ass'n, 40 F.3d 926, 928 (8th Cir. 1994); Dataphase Systems, Inc. v. C L Systems, Inc., 640 F.2d 109, 114 (8th Cir. 1998).

By: William M. Corrigan, Jr. Armstrong Teasdale LLP

Mr. Corrigan represents both employers and employees concerning the enforcement of non-compete agreements. He is a graduate of the University of Missouri-Columbia School of Law and is currently serving on the Board of Governors of The Missouri Bar.

1998 William M. Corrigan, Jr.

JOURNAL OF THE MISSOURI BAR
Volume 54 - No.2 - May-June 1998