Missouri 2024 Regular Session

Missouri House Bill HB2787 Compare Versions

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11 SECONDREGULARSESSION
22 HOUSEBILLNO.2787
33 102NDGENERALASSEMBLY
44 INTRODUCEDBYREPRESENTATIVEKEATHLEY.
55 5675H.01I DANARADEMANMILLER,ChiefClerk
66 ANACT
77 Toamendchapter431,RSMo,byaddingtheretonineteennewsectionsrelatingtorestrictive
88 employmentagreements,withpenaltyprovisions.
99 BeitenactedbytheGeneralAssemblyofthestateofMissouri,asfollows:
1010 SectionA.Chapter431,RSMo,isamendedbyaddingtheretonineteennewsections,
1111 2tobeknownassections431.300,431.302,431.304,431.306,431.308,431.310,431.312,
1212 3431.314,431.316,431.318,431.320,431.322,431.324,431.326,431.328,431.330,431.332,
1313 4431.334,and431.338,toreadasfollows:
1414 431.300.Sections431.300to431.338maybecitedasthe"UniformRestrictive
1515 2EmploymentAgreementAct".
1616 431.302.Insections431.300to431.338:
1717 2 (1)"Confidentialityagreement"meansarestrictiveemploymentagreement
1818 3that:
1919 4 (a)Prohibitsaworkerfromusingordisclosinginformation;and
2020 5 (b)Isnotaconditionofsettlementorotherresolutionofadispute;
2121 6 (2)"Electronic"meansrelatingtotechnologyhavingelectrical,digital,
2222 7magnetic,wireless,optical,electromagnetic,orsimilarcapabilities;
2323 8 (3)"Employer"meansapersonthathiresorcontractswithaworkertowork
2424 9fortheperson;
2525 10 (4)"No-businessagreement"meansarestrictiveemploymentagreementthat
2626 11prohibitsaworkerfromworkingforaclientorcustomeroftheemployer;
2727 EXPLANATION—Matterenclosedinbold-facedbrackets[thus] intheabovebillisnotenactedandis
2828 intendedtobeomittedfromthelaw.Matterinbold-facetypeintheabovebillisproposedlanguage. 12 (5)"Noncompeteagreement"meansarestrictiveemploymentagreementthat
2929 13prohibitsaworkerfromworkingotherthanfortheemployer.Thetermdoesnot
3030 14includeano-businessagreement;
3131 15 (6)"Nonsolicitationagreement"meansarestrictiveemploymentagreementthat
3232 16prohibitsaworkerfromsolicitingaclientorcustomeroftheemployer;
3333 17 (7)"No-recruitagreement"meansarestrictiveemploymentagreementthat
3434 18prohibitsaworkerfromhiringorrecruitinganotherworkeroftheemployer;
3535 19 (8)"Payment-for-competitionagreement"meansarestrictiveemployment
3636 20agreementthatimposesanadversefinancialconsequenceonaworkerforworking
3737 21otherthanfortheemployerbutdoesnotexpresslyprohibitthework;
3838 22 (9)"Person"meansanindividual,estate,businessornonprofitentity,orother
3939 23legalentity.Thetermdoesnotincludeapubliccorporationorgovernmentor
4040 24governmentalsubdivision,agency,orinstrumentality;
4141 25 (10)"Record"meansinformation:
4242 26 (a)Inscribedonatangiblemedium;or
4343 27 (b)Storedinanelectronicorothermediumandretrievableinperceivableform;
4444 28 (11)"Restrictiveemploymentagreement"meansanagreementorpartof
4545 29anotheragreementbetweenanemployerandworkerthatprohibits,limits,orsetsa
4646 30conditiononworkingotherthanfortheemployeraftertheworkrelationshipendsora
4747 31saleofabusinessisconsummated.Thetermincludesaconfidentialityagreement,no-
4848 32businessagreement,noncompeteagreement,nonsolicitationagreement,no-recruit
4949 33agreement,payment-for-competitionagreement,andtraining-repaymentagreement;
5050 34 (12)"Saleofabusiness"meanssale,merger,consolidation,amalgamation,
5151 35reorganization,orothertransaction,howeverdenominated,of:
5252 36 (a)Allorpartofabusinessornonprofitentityorassociation,orallorpartofits
5353 37assets;or
5454 38 (b)Asubstantialownershipinterestintheentityorassociation;
5555 39 (13)"Sign"means,withpresentintenttoauthenticateoradoptarecord:
5656 40 (a)Executeoradoptatangiblesymbol;or
5757 41 (b)Attachtoorlogicallyassociatewiththerecordanelectronicsymbol,sound,
5858 42orprocess;
5959 43 (14)"Signedagreement"meansarestrictiveemploymentagreementsignedby
6060 44theworkerandemployer;
6161 45 (15)"Specialtraining"meansinstructionorothereducationaworkerreceives
6262 46fromasourceotherthantheemployerthat:
6363 47 (a)Isdesignedtoenhancetheabilityoftheworkertoperformtheworker’s
6464 48work;
6565 HB2787 2 49 (b)Isnotnormallyreceivedbyotherworkers;and
6666 50 (c)Requiresasignificantandidentifiableexpenditurebytheemployerdistinct
6767 51fromordinaryon-the-jobtraining;
6868 52 (16)"Statedrateofpay"meansthecompensation,calculatedonanannualized
6969 53basis,anemployeragreestopayaworker.Theterm:
7070 54 (a)Includesawage,salary,professionalfee,othercompensationforpersonal
7171 55service,andthefairmarketvalueofallremunerationotherthancash;and
7272 56 (b)Doesnotinclude:
7373 57 a.Ahealthcarebenefit,severancepay,retirementbenefit,orexpense
7474 58reimbursement;
7575 59 b.Distributionofearningsandprofitthatisnotcompensationforpersonal
7676 60service;or
7777 61 c.Anticipatedbutindeterminablecompensation,includingatip,bonus,or
7878 62commission;
7979 63 (17)"Tradesecret"hasthemeaningassuchtermisdefinedundersection
8080 64417.453;
8181 65 (18)"Training-repaymentagreement"meansarestrictiveemployment
8282 66agreementthatrequiresaworkertorepaytheemployerfortrainingcostsincurred
8383 67bytheemployer;
8484 68 (19)"Work"meansprovidingservice;
8585 69 (20)"Worker"meansanindividualwhoworksforanemployer.Theterm:
8686 70 (a)Includesanemployee,independentcontractor,extern,intern,volunteer,
8787 71apprentice,soleproprietorwhoprovidesservicetoaclientorcustomer,andan
8888 72individualwhoprovidesservicethroughabusinessornonprofitentityorassociation;
8989 73 (b)Doesnotincludeanindividual,eveniftheindividualperformsincidental
9090 74servicefortheemployer,whosesolerelationshipwiththeemployeris:
9191 75 a.Asamemberofaboardofdirectorsorothergoverningoradvisoryboard;
9292 76 b.Anindividualunderwhoseauthoritythepowersofabusinessornonprofit
9393 77entityorassociationareexercised;
9494 78 c.Aninvestor;or
9595 79 d.Avendorofgoods.
9696 431.304.1.Sections431.300to431.338applytoarestrictiveemployment
9797 2agreement.Ifarestrictiveemploymentagreementispartofanotheragreement,
9898 3sections431.300to431.338donotaffectotherpartsoftheotheragreement.
9999 4 2.Sections431.300to431.338supersedecommonlawonlytotheextentthat
100100 5sections431.300to431.338applytoarestrictiveemploymentagreementbutotherwise
101101 6doesnotaffectprinciplesoflawandequityconsistentwithsections431.300to431.338.
102102 HB2787 3 7 3.Sections431.300to431.338donotaffectanagreementtotakeanactionsolely
103103 8totransfer,perfect,orenforceapatent,copyright,tradesecret,orsimilarright.
104104 9 4.Sections431.300to431.338donotaffectanoncompetitionobligationarising
105105 10solelyasaresultofanexistingownershipinterestinabusinessentity.
106106 11 5.Sections431.300to431.338donotaffectanagreementthatrequiresaworker
107107 12toforfeitcompensationaftertheworkrelationshipends,includingvacationor
108108 13retirementbenefits,therighttowhichaccruedbeforetheworkrelationshipends.
109109 431.306.1.Exceptasprovidedinsubsection5ofthissection,arestrictive
110110 2employmentagreementisprohibitedandunenforceableunless:
111111 3 (1)Theemployerprovidesacopyoftheproposedagreementinarecordto:
112112 4 (a)Subjecttosubsection2ofthissection,aprospectiveworker,atleastfourteen
113113 5daysbeforetheprospectiveworkeracceptsworkorcommenceswork,whicheveris
114114 6earlier;
115115 7 (b)Acurrentworkerwhoreceivesamaterialincreaseincompensation,atleast
116116 8fourteendaysbeforetheincreaseortheworkeracceptsachangeinjobstatusor
117117 9responsibilities,whicheverisearlier;or
118118 10 (c)Adepartingworkerwhoisgivenconsiderationinadditiontoanythingof
119119 11valuetowhichtheworkeralreadyisentitled,atleastfourteendaysbeforethe
120120 12agreementisrequiredtobesigned;
121121 13 (2)Withthecopyoftheproposedagreementprovidedundersubdivision(1)of
122122 14thissubsection,theemployerprovidestheworkerinarecordtheseparatenotice,inthe
123123 15preferredlanguageoftheworkerifavailable,prescribedbythedepartmentoflabor
124124 16andindustrialrelationsundersubsection4ofthissection;
125125 17 (3)Theproposedagreementandthesignedagreementclearlyspecifythe
126126 18information,typeofworkactivity,orextentofcompetitionthattheagreement
127127 19prohibits,limits,orsetsconditionsonaftertheworkrelationshipends;
128128 20 (4)Theagreementisinarecordseparatelysignedbytheworkerandemployer
129129 21andtheemployerpromptlyprovidestheworkeracopyofthesignedagreement;and
130130 22 (5)Subjecttosubsection3ofthissection,theemployerprovidesanadditional
131131 23copyoftheagreementtotheworker,notlaterthanfourteendaysaftertheworker,ina
132132 24record,requestsacopy,unlesstheemployerreasonablyandingoodfaithisunableto
133133 25providethecopynotlaterthanfourteendaysaftertherequestandtheworkerisnot
134134 26prejudicedbythedelay.
135135 27 2.Aworkermaywaivethefourteen-dayrequirementofparagraph(a)of
136136 28subdivision(1)ofsubsection1ofthissectioniftheworkerreceivesthesignedagreement
137137 29beforebeginningwork.Iftheworkerwaivestherequirement,theworkermayrescind
138138 HB2787 4 30theentireemploymentagreementnotlaterthanfourteendaysaftertheworkerreceives
139139 31theagreement.
140140 32 3.Anemployerisnotrequiredundersubdivision(5)ofsubsection1ofthis
141141 33sectiontoprovideanadditionalcopyoftheagreementmorethanonceduringa
142142 34calendaryear.
143143 35 4.Thedepartmentoflaborandindustrialrelationsshallprescribethenoticean
144144 36employermustprovideundersubdivision(2)ofsubsection1ofthissection.Thenotice
145145 37mustinformtheworker,inlanguageanaveragereadercanunderstand,ofthe
146146 38requirementsofsections431.300to431.338,includingtherequirementsofsubsection1
147147 39ofthissectionandsections431.308to431.326andstatethatsections431.300to431.338
148148 40establishpenaltiesagainstanemployerthatentersintoaprohibitedagreement.The
149149 41departmentoflaborandindustrialrelationsshallmakethenoticeavailableto
150150 42employersonitspubliclyaccessiblewebsiteorinotherappropriateways.The
151151 43departmentoflaborandindustrialrelationsmay:
152152 44 (1)Produceaseparatenoticeforeachtypeofrestrictiveemploymentagreement;
153153 45and
154154 46 (2)TranslatethenoticeintolanguagesotherthanEnglishusedbyasubstantial
155155 47portionofthestate’slaborforce.
156156 48 5.Thissectiondoesnotapplytoarestrictiveemploymentagreementin
157157 49connectionwiththesaleofabusinessofwhichtheworkerisasubstantialownerand
158158 50consentstothesale.
159159 431.308.Arestrictiveemploymentagreement,otherthanaconfidentiality
160160 2agreementortraining-repaymentagreement,is:
161161 3 (1)Prohibitedandunenforceableif,whentheworkersignstheagreement,the
162162 4workerhasastatedrateofpaylessthantheannualmeanwageofemployeesinthis
163163 5stateasdeterminedbytheUnitedStatesDepartmentofLabor,BureauofLabor
164164 6Statistics;and
165165 7 (2)Unenforceableif,atanytimeduringtheworkrelationship,theworker’s
166166 8compensationfromtheemployer,calculatedonanannualizedbasis,islessthanthe
167167 9annualmeanwageofemployeesinthisstateasdeterminedbytheUnitedStates
168168 10DepartmentofLabor,BureauofLaborStatistics.
169169 431.310.Arestrictiveemploymentagreement,otherthanaconfidentiality
170170 2agreementortraining-repaymentagreement,isunenforceableif:
171171 3 (1)theworkerresignsforgoodcauseattributabletotheemployer;or
172172 4 (2)theemployerterminatestheworkerforareasonotherthanwillful
173173 5misconductorthecompletionoftheagreedworkorthetermofthecontract.
174174 HB2787 5 431.312.Arestrictiveemploymentagreementisprohibitedandunenforceable
175175 2unlessitisreasonable.
176176 431.314.Anoncompeteagreementisprohibitedandunenforceableunless:
177177 2 (1)Theagreementprotectsanyofthefollowinglegitimatebusinessinterests:
178178 3 (a)Thesaleofabusinessofwhichtheworkerisasubstantialownerand
179179 4consentstothesale;
180180 5 (b)Thecreationofabusinessinwhichtheworkerisasubstantialowner;
181181 6 (c)Atradesecret;or
182182 7 (d)Anongoingclientorcustomerrelationshipoftheemployer;
183183 8 (2)Whentheworkersignstheagreementandthroughthetimeofenforcement,
184184 9theagreementisnarrowlytailoredinduration,geographicalarea,andscopeofactual
185185 10competitiontoprotectaninterestundersubdivision(1)ofthissection,andtheinterest
186186 11cannotbeprotectedadequatelybyanotherrestrictiveemploymentagreement;and
187187 12 (3)Theprohibitiononcompetitionlastsnotlongerthan:
188188 13 (a)Fiveyearsaftertheworkrelationshipendswhenprotectinganinterestunder
189189 14paragraph(a)or(b)ofsubdivision(1)ofthissection;or
190190 15 (b)Oneyearaftertheworkrelationshipendswhenprotectinganinterestunder
191191 16paragraph(c)or(d)ofsubdivision(1)ofthissectionbutnotaninterestunder
192192 17paragraph(a)or(b)ofsubdivision(1)ofthissection.
193193 431.316.Aconfidentialityagreementisprohibitedandunenforceableunlessthe
194194 2workermayuseanddiscloseinformationthat:
195195 3 (1)Arisesfromtheworker’sgeneraltraining,knowledge,skill,orexperience,
196196 4whethergainedonthejoborotherwise;
197197 5 (2)Isreadilyascertainabletotherelevantpublic;or
198198 6 (3)Isirrelevanttotheemployer’sbusiness.
199199 431.318.Ano-businessagreementisprohibitedandunenforceableunlessthe
200200 2agreement:
201201 3 (1)Appliesonlytoaprospectiveorongoingclientorcustomeroftheemployer
202202 4withwhichtheworkerhadworkedpersonally;and
203203 5 (2)Lastsnotlongerthansixmonthsaftertheworkrelationshipbetweenthe
204204 6employerandworkerends.
205205 431.320.Anonsolicitationagreementisprohibitedandunenforceableunlessthe
206206 2agreement:
207207 3 (1)Appliesonlytoaprospectiveorongoingclientorcustomeroftheemployer
208208 4withwhichtheworkerhadworkedpersonally;and
209209 5 (2)Lastsnotlongerthanoneyearaftertheworkrelationshipbetweenthe
210210 6employerandworkerends.
211211 HB2787 6 431.322.Ano-recruitagreementisprohibitedandunenforceableunlessthe
212212 2agreementprohibitshiringorrecruitingonly:
213213 3 (1)Anotherworkercurrentlyworkingfortheemployerwithwhomtheworker
214214 4hadworkedpersonally;and
215215 5 (2)Lastsnotlongerthansixmonthsaftertheworkrelationshipbetweenthe
216216 6employerandworkerends.
217217 431.324.Apayment-for-competitionagreementisprohibitedandunenforceable
218218 2unlesstheagreement:
219219 3 (1)Imposesafinancialconsequencethatisnotgreaterthantheactual
220220 4competitiveharmtotheemployer;and
221221 5 (2)Lastsnotlongerthanoneyearaftertheworkrelationshipbetweenthe
222222 6employerandworkerends.
223223 431.326.Atraining-repaymentagreementisprohibitedandunenforceable
224224 2unlesstheagreement:
225225 3 (1)Requiresrepaymentonlyofthecostofspecialtraining;
226226 4 (2)Lastsnotlongerthantwoyearsafterthespecialtrainingiscompleted;and
227227 5 (3)Proratestherepaymentforworkdoneduringthepost-trainingperiod.
228228 431.328.Exceptasprovidedundersubsection2ofsection431.306orinthe
229229 2contextofresolvinganissueinlitigationorotherdisputeresolution,apartytoa
230230 3restrictiveemploymentagreementmaynotwaivearequirementofsections431.300to
231231 4431.338orstipulatetoafacttoavoidarequirementofsections431.300to431.338.
232232 431.330.1.Thecourtmaynotmodifyarestrictiveemploymentagreementthat
233233 2restrictsaworkerbeyondaperiodimposedundersections431.300to431.338tomake
234234 3theagreementenforceable.Thecourtmaymodifyanagreementthatotherwiseviolates
235235 4sections431.300to431.338onlyonafindingthattheemployerreasonablyandingood
236236 5faithbelievedtheagreementwasenforceableundersections431.300to431.338andonly
237237 6totheextentnecessarytoprotecttheemployer’sinterestandrendertheagreement
238238 7enforceable.
239239 8 2.Aworkerwhoisapartytoarestrictiveemploymentagreementora
240240 9subsequentemployerthathashiredorisconsideringhiringtheworkermayseeka
241241 10declaratoryjudgmentthattheagreementisunenforceable.
242242 11 3.Inadditiontootherjudicialremedies,acourtmayawardstatutorydamages
243243 12undersubsection5ofthissectionandinaprivateactionreasonableattorney’sfeestoa
244244 13partythatsuccessfullychallengesordefendsagainstenforceabilityofarestrictive
245245 14employmentagreementorprovesaviolationofsections431.300to431.338.
246246 15 4.Anemployerseekingtoenforcearestrictiveemploymentagreementhasthe
247247 16burdenofprovingcompliancewithsections431.300to431.338.
248248 HB2787 7 17 5.Anemployerthatentersarestrictiveemploymentagreementthatthe
249249 18employerknowsorreasonablyshouldknowisprohibitedbysections431.300to431.338
250250 19commitsacivilviolation.Thedepartmentoflaborandindustrialrelationsorthe
251251 20attorneygeneralmaybringanactiononbehalfoftheworker,ortheworkermaybring
252252 21aprivateaction,againsttheemployertoenforcethissubsection.Thecourtmayaward
253253 22statutorydamagesofnotmorethanfivethousanddollarsperworkerperagreementfor
254254 23eachviolationofthissubsection.
255255 431.332.1.Achoiceoflawprovisionthatappliestoarestrictiveemployment
256256 2agreementisprohibitedandunenforceableunlessitrequiresthatadisputearising
257257 3undertheagreementbegovernedbythelawofthejurisdictionwheretheworker
258258 4primarilyworksfortheemployeror,iftheworkrelationshiphasended,thejurisdiction
259259 5wheretheworkerprimarilyworkedwhentherelationshipended.
260260 6 2.Achoiceofvenueprovisionthatappliestoarestrictiveemployment
261261 7agreementisprohibitedandunenforceableunlessitrequiresthatadisputearising
262262 8undertheagreementbedecidedinajurisdictionwhere:
263263 9 (1)Theworkerprimarilyworksor,iftheworkrelationshiphasended,a
264264 10jurisdictionwheretheworkerprimarilyworkedwhentherelationshipended;or
265265 11 (2)Theworkerresidesatthetimeofthedispute.
266266 431.334.Inapplyingandconstruingthisuniformact,acourtshallconsiderthe
267267 2promotionofuniformityofthelawamongjurisdictionsthatenactit.
268268 431.338.1.Exceptasprovidedinthissection,sections431.300to431.338donot
269269 2affectthevalidityofarestrictiveemploymentagreementineffectbeforeAugust28,
270270 32024.
271271 4 2.Theprovisionsofsubdivision(5)ofsubsection1ofsection431.306andsection
272272 5431.308applytoarestrictiveemploymentagreemententeredintobefore,on,orafter
273273 6August28,2024.
274274
275275 HB2787 8