Modifies provisions relating to covenants involving business entities
The bill impacts state laws regarding employment and business relationships, particularly concerning the enforceability of non-solicitation agreements post-employment. It allows for longer durations—up to two years—on certain covenants without being labeled as restraints of trade, thus providing businesses greater protection against competition from former employees. This change could potentially lead to a more stable workforce for businesses as they seek to prevent the poaching of employees by competitors.
Senate Bill 833 seeks to modify the existing provisions concerning business covenants in Missouri. The primary change is the repeal of section 431.202 and the establishment of two new sections, 431.201 and 431.202, which redefine the enforceability of covenants not to solicit or recruit employees from a business entity. The revised bill aims to clarify the circumstances under which such covenants can be considered reasonable and enforceable, specifically not classifying them as restraints of trade under certain conditions.
However, some points of contention arise from the bill's modifications, particularly in the areas of potential overreach concerning an employee's right to seek new employment. Critics may argue that extending the duration of enforceable covenants could unduly restrict former employees from accessing job opportunities, limiting their career mobility. Additionally, the bill's allowance for modifications by the courts if covenants are deemed overly broad or lengthy raises concerns about the balance of power between business entities and employees.