SECONDREGULARSESSION
HOUSEBILLNO.2787
102NDGENERALASSEMBLY
INTRODUCEDBYREPRESENTATIVEKEATHLEY.
5675H.01I DANARADEMANMILLER,ChiefClerk
ANACT
Toamendchapter431,RSMo,byaddingtheretonineteennewsectionsrelatingtorestrictive
employmentagreements,withpenaltyprovisions.
BeitenactedbytheGeneralAssemblyofthestateofMissouri,asfollows:
SectionA.Chapter431,RSMo,isamendedbyaddingtheretonineteennewsections,
2tobeknownassections431.300,431.302,431.304,431.306,431.308,431.310,431.312,
3431.314,431.316,431.318,431.320,431.322,431.324,431.326,431.328,431.330,431.332,
4431.334,and431.338,toreadasfollows:
431.300.Sections431.300to431.338maybecitedasthe"UniformRestrictive
2EmploymentAgreementAct".
431.302.Insections431.300to431.338:
2 (1)"Confidentialityagreement"meansarestrictiveemploymentagreement
3that:
4 (a)Prohibitsaworkerfromusingordisclosinginformation;and
5 (b)Isnotaconditionofsettlementorotherresolutionofadispute;
6 (2)"Electronic"meansrelatingtotechnologyhavingelectrical,digital,
7magnetic,wireless,optical,electromagnetic,orsimilarcapabilities;
8 (3)"Employer"meansapersonthathiresorcontractswithaworkertowork
9fortheperson;
10 (4)"No-businessagreement"meansarestrictiveemploymentagreementthat
11prohibitsaworkerfromworkingforaclientorcustomeroftheemployer;
EXPLANATION—Matterenclosedinbold-facedbrackets[thus] intheabovebillisnotenactedandis
intendedtobeomittedfromthelaw.Matterinbold-facetypeintheabovebillisproposedlanguage. 12 (5)"Noncompeteagreement"meansarestrictiveemploymentagreementthat
13prohibitsaworkerfromworkingotherthanfortheemployer.Thetermdoesnot
14includeano-businessagreement;
15 (6)"Nonsolicitationagreement"meansarestrictiveemploymentagreementthat
16prohibitsaworkerfromsolicitingaclientorcustomeroftheemployer;
17 (7)"No-recruitagreement"meansarestrictiveemploymentagreementthat
18prohibitsaworkerfromhiringorrecruitinganotherworkeroftheemployer;
19 (8)"Payment-for-competitionagreement"meansarestrictiveemployment
20agreementthatimposesanadversefinancialconsequenceonaworkerforworking
21otherthanfortheemployerbutdoesnotexpresslyprohibitthework;
22 (9)"Person"meansanindividual,estate,businessornonprofitentity,orother
23legalentity.Thetermdoesnotincludeapubliccorporationorgovernmentor
24governmentalsubdivision,agency,orinstrumentality;
25 (10)"Record"meansinformation:
26 (a)Inscribedonatangiblemedium;or
27 (b)Storedinanelectronicorothermediumandretrievableinperceivableform;
28 (11)"Restrictiveemploymentagreement"meansanagreementorpartof
29anotheragreementbetweenanemployerandworkerthatprohibits,limits,orsetsa
30conditiononworkingotherthanfortheemployeraftertheworkrelationshipendsora
31saleofabusinessisconsummated.Thetermincludesaconfidentialityagreement,no-
32businessagreement,noncompeteagreement,nonsolicitationagreement,no-recruit
33agreement,payment-for-competitionagreement,andtraining-repaymentagreement;
34 (12)"Saleofabusiness"meanssale,merger,consolidation,amalgamation,
35reorganization,orothertransaction,howeverdenominated,of:
36 (a)Allorpartofabusinessornonprofitentityorassociation,orallorpartofits
37assets;or
38 (b)Asubstantialownershipinterestintheentityorassociation;
39 (13)"Sign"means,withpresentintenttoauthenticateoradoptarecord:
40 (a)Executeoradoptatangiblesymbol;or
41 (b)Attachtoorlogicallyassociatewiththerecordanelectronicsymbol,sound,
42orprocess;
43 (14)"Signedagreement"meansarestrictiveemploymentagreementsignedby
44theworkerandemployer;
45 (15)"Specialtraining"meansinstructionorothereducationaworkerreceives
46fromasourceotherthantheemployerthat:
47 (a)Isdesignedtoenhancetheabilityoftheworkertoperformtheworker’s
48work;
HB2787 2 49 (b)Isnotnormallyreceivedbyotherworkers;and
50 (c)Requiresasignificantandidentifiableexpenditurebytheemployerdistinct
51fromordinaryon-the-jobtraining;
52 (16)"Statedrateofpay"meansthecompensation,calculatedonanannualized
53basis,anemployeragreestopayaworker.Theterm:
54 (a)Includesawage,salary,professionalfee,othercompensationforpersonal
55service,andthefairmarketvalueofallremunerationotherthancash;and
56 (b)Doesnotinclude:
57 a.Ahealthcarebenefit,severancepay,retirementbenefit,orexpense
58reimbursement;
59 b.Distributionofearningsandprofitthatisnotcompensationforpersonal
60service;or
61 c.Anticipatedbutindeterminablecompensation,includingatip,bonus,or
62commission;
63 (17)"Tradesecret"hasthemeaningassuchtermisdefinedundersection
64417.453;
65 (18)"Training-repaymentagreement"meansarestrictiveemployment
66agreementthatrequiresaworkertorepaytheemployerfortrainingcostsincurred
67bytheemployer;
68 (19)"Work"meansprovidingservice;
69 (20)"Worker"meansanindividualwhoworksforanemployer.Theterm:
70 (a)Includesanemployee,independentcontractor,extern,intern,volunteer,
71apprentice,soleproprietorwhoprovidesservicetoaclientorcustomer,andan
72individualwhoprovidesservicethroughabusinessornonprofitentityorassociation;
73 (b)Doesnotincludeanindividual,eveniftheindividualperformsincidental
74servicefortheemployer,whosesolerelationshipwiththeemployeris:
75 a.Asamemberofaboardofdirectorsorothergoverningoradvisoryboard;
76 b.Anindividualunderwhoseauthoritythepowersofabusinessornonprofit
77entityorassociationareexercised;
78 c.Aninvestor;or
79 d.Avendorofgoods.
431.304.1.Sections431.300to431.338applytoarestrictiveemployment
2agreement.Ifarestrictiveemploymentagreementispartofanotheragreement,
3sections431.300to431.338donotaffectotherpartsoftheotheragreement.
4 2.Sections431.300to431.338supersedecommonlawonlytotheextentthat
5sections431.300to431.338applytoarestrictiveemploymentagreementbutotherwise
6doesnotaffectprinciplesoflawandequityconsistentwithsections431.300to431.338.
HB2787 3 7 3.Sections431.300to431.338donotaffectanagreementtotakeanactionsolely
8totransfer,perfect,orenforceapatent,copyright,tradesecret,orsimilarright.
9 4.Sections431.300to431.338donotaffectanoncompetitionobligationarising
10solelyasaresultofanexistingownershipinterestinabusinessentity.
11 5.Sections431.300to431.338donotaffectanagreementthatrequiresaworker
12toforfeitcompensationaftertheworkrelationshipends,includingvacationor
13retirementbenefits,therighttowhichaccruedbeforetheworkrelationshipends.
431.306.1.Exceptasprovidedinsubsection5ofthissection,arestrictive
2employmentagreementisprohibitedandunenforceableunless:
3 (1)Theemployerprovidesacopyoftheproposedagreementinarecordto:
4 (a)Subjecttosubsection2ofthissection,aprospectiveworker,atleastfourteen
5daysbeforetheprospectiveworkeracceptsworkorcommenceswork,whicheveris
6earlier;
7 (b)Acurrentworkerwhoreceivesamaterialincreaseincompensation,atleast
8fourteendaysbeforetheincreaseortheworkeracceptsachangeinjobstatusor
9responsibilities,whicheverisearlier;or
10 (c)Adepartingworkerwhoisgivenconsiderationinadditiontoanythingof
11valuetowhichtheworkeralreadyisentitled,atleastfourteendaysbeforethe
12agreementisrequiredtobesigned;
13 (2)Withthecopyoftheproposedagreementprovidedundersubdivision(1)of
14thissubsection,theemployerprovidestheworkerinarecordtheseparatenotice,inthe
15preferredlanguageoftheworkerifavailable,prescribedbythedepartmentoflabor
16andindustrialrelationsundersubsection4ofthissection;
17 (3)Theproposedagreementandthesignedagreementclearlyspecifythe
18information,typeofworkactivity,orextentofcompetitionthattheagreement
19prohibits,limits,orsetsconditionsonaftertheworkrelationshipends;
20 (4)Theagreementisinarecordseparatelysignedbytheworkerandemployer
21andtheemployerpromptlyprovidestheworkeracopyofthesignedagreement;and
22 (5)Subjecttosubsection3ofthissection,theemployerprovidesanadditional
23copyoftheagreementtotheworker,notlaterthanfourteendaysaftertheworker,ina
24record,requestsacopy,unlesstheemployerreasonablyandingoodfaithisunableto
25providethecopynotlaterthanfourteendaysaftertherequestandtheworkerisnot
26prejudicedbythedelay.
27 2.Aworkermaywaivethefourteen-dayrequirementofparagraph(a)of
28subdivision(1)ofsubsection1ofthissectioniftheworkerreceivesthesignedagreement
29beforebeginningwork.Iftheworkerwaivestherequirement,theworkermayrescind
HB2787 4 30theentireemploymentagreementnotlaterthanfourteendaysaftertheworkerreceives
31theagreement.
32 3.Anemployerisnotrequiredundersubdivision(5)ofsubsection1ofthis
33sectiontoprovideanadditionalcopyoftheagreementmorethanonceduringa
34calendaryear.
35 4.Thedepartmentoflaborandindustrialrelationsshallprescribethenoticean
36employermustprovideundersubdivision(2)ofsubsection1ofthissection.Thenotice
37mustinformtheworker,inlanguageanaveragereadercanunderstand,ofthe
38requirementsofsections431.300to431.338,includingtherequirementsofsubsection1
39ofthissectionandsections431.308to431.326andstatethatsections431.300to431.338
40establishpenaltiesagainstanemployerthatentersintoaprohibitedagreement.The
41departmentoflaborandindustrialrelationsshallmakethenoticeavailableto
42employersonitspubliclyaccessiblewebsiteorinotherappropriateways.The
43departmentoflaborandindustrialrelationsmay:
44 (1)Produceaseparatenoticeforeachtypeofrestrictiveemploymentagreement;
45and
46 (2)TranslatethenoticeintolanguagesotherthanEnglishusedbyasubstantial
47portionofthestate’slaborforce.
48 5.Thissectiondoesnotapplytoarestrictiveemploymentagreementin
49connectionwiththesaleofabusinessofwhichtheworkerisasubstantialownerand
50consentstothesale.
431.308.Arestrictiveemploymentagreement,otherthanaconfidentiality
2agreementortraining-repaymentagreement,is:
3 (1)Prohibitedandunenforceableif,whentheworkersignstheagreement,the
4workerhasastatedrateofpaylessthantheannualmeanwageofemployeesinthis
5stateasdeterminedbytheUnitedStatesDepartmentofLabor,BureauofLabor
6Statistics;and
7 (2)Unenforceableif,atanytimeduringtheworkrelationship,theworker’s
8compensationfromtheemployer,calculatedonanannualizedbasis,islessthanthe
9annualmeanwageofemployeesinthisstateasdeterminedbytheUnitedStates
10DepartmentofLabor,BureauofLaborStatistics.
431.310.Arestrictiveemploymentagreement,otherthanaconfidentiality
2agreementortraining-repaymentagreement,isunenforceableif:
3 (1)theworkerresignsforgoodcauseattributabletotheemployer;or
4 (2)theemployerterminatestheworkerforareasonotherthanwillful
5misconductorthecompletionoftheagreedworkorthetermofthecontract.
HB2787 5 431.312.Arestrictiveemploymentagreementisprohibitedandunenforceable
2unlessitisreasonable.
431.314.Anoncompeteagreementisprohibitedandunenforceableunless:
2 (1)Theagreementprotectsanyofthefollowinglegitimatebusinessinterests:
3 (a)Thesaleofabusinessofwhichtheworkerisasubstantialownerand
4consentstothesale;
5 (b)Thecreationofabusinessinwhichtheworkerisasubstantialowner;
6 (c)Atradesecret;or
7 (d)Anongoingclientorcustomerrelationshipoftheemployer;
8 (2)Whentheworkersignstheagreementandthroughthetimeofenforcement,
9theagreementisnarrowlytailoredinduration,geographicalarea,andscopeofactual
10competitiontoprotectaninterestundersubdivision(1)ofthissection,andtheinterest
11cannotbeprotectedadequatelybyanotherrestrictiveemploymentagreement;and
12 (3)Theprohibitiononcompetitionlastsnotlongerthan:
13 (a)Fiveyearsaftertheworkrelationshipendswhenprotectinganinterestunder
14paragraph(a)or(b)ofsubdivision(1)ofthissection;or
15 (b)Oneyearaftertheworkrelationshipendswhenprotectinganinterestunder
16paragraph(c)or(d)ofsubdivision(1)ofthissectionbutnotaninterestunder
17paragraph(a)or(b)ofsubdivision(1)ofthissection.
431.316.Aconfidentialityagreementisprohibitedandunenforceableunlessthe
2workermayuseanddiscloseinformationthat:
3 (1)Arisesfromtheworker’sgeneraltraining,knowledge,skill,orexperience,
4whethergainedonthejoborotherwise;
5 (2)Isreadilyascertainabletotherelevantpublic;or
6 (3)Isirrelevanttotheemployer’sbusiness.
431.318.Ano-businessagreementisprohibitedandunenforceableunlessthe
2agreement:
3 (1)Appliesonlytoaprospectiveorongoingclientorcustomeroftheemployer
4withwhichtheworkerhadworkedpersonally;and
5 (2)Lastsnotlongerthansixmonthsaftertheworkrelationshipbetweenthe
6employerandworkerends.
431.320.Anonsolicitationagreementisprohibitedandunenforceableunlessthe
2agreement:
3 (1)Appliesonlytoaprospectiveorongoingclientorcustomeroftheemployer
4withwhichtheworkerhadworkedpersonally;and
5 (2)Lastsnotlongerthanoneyearaftertheworkrelationshipbetweenthe
6employerandworkerends.
HB2787 6 431.322.Ano-recruitagreementisprohibitedandunenforceableunlessthe
2agreementprohibitshiringorrecruitingonly:
3 (1)Anotherworkercurrentlyworkingfortheemployerwithwhomtheworker
4hadworkedpersonally;and
5 (2)Lastsnotlongerthansixmonthsaftertheworkrelationshipbetweenthe
6employerandworkerends.
431.324.Apayment-for-competitionagreementisprohibitedandunenforceable
2unlesstheagreement:
3 (1)Imposesafinancialconsequencethatisnotgreaterthantheactual
4competitiveharmtotheemployer;and
5 (2)Lastsnotlongerthanoneyearaftertheworkrelationshipbetweenthe
6employerandworkerends.
431.326.Atraining-repaymentagreementisprohibitedandunenforceable
2unlesstheagreement:
3 (1)Requiresrepaymentonlyofthecostofspecialtraining;
4 (2)Lastsnotlongerthantwoyearsafterthespecialtrainingiscompleted;and
5 (3)Proratestherepaymentforworkdoneduringthepost-trainingperiod.
431.328.Exceptasprovidedundersubsection2ofsection431.306orinthe
2contextofresolvinganissueinlitigationorotherdisputeresolution,apartytoa
3restrictiveemploymentagreementmaynotwaivearequirementofsections431.300to
4431.338orstipulatetoafacttoavoidarequirementofsections431.300to431.338.
431.330.1.Thecourtmaynotmodifyarestrictiveemploymentagreementthat
2restrictsaworkerbeyondaperiodimposedundersections431.300to431.338tomake
3theagreementenforceable.Thecourtmaymodifyanagreementthatotherwiseviolates
4sections431.300to431.338onlyonafindingthattheemployerreasonablyandingood
5faithbelievedtheagreementwasenforceableundersections431.300to431.338andonly
6totheextentnecessarytoprotecttheemployer’sinterestandrendertheagreement
7enforceable.
8 2.Aworkerwhoisapartytoarestrictiveemploymentagreementora
9subsequentemployerthathashiredorisconsideringhiringtheworkermayseeka
10declaratoryjudgmentthattheagreementisunenforceable.
11 3.Inadditiontootherjudicialremedies,acourtmayawardstatutorydamages
12undersubsection5ofthissectionandinaprivateactionreasonableattorney’sfeestoa
13partythatsuccessfullychallengesordefendsagainstenforceabilityofarestrictive
14employmentagreementorprovesaviolationofsections431.300to431.338.
15 4.Anemployerseekingtoenforcearestrictiveemploymentagreementhasthe
16burdenofprovingcompliancewithsections431.300to431.338.
HB2787 7 17 5.Anemployerthatentersarestrictiveemploymentagreementthatthe
18employerknowsorreasonablyshouldknowisprohibitedbysections431.300to431.338
19commitsacivilviolation.Thedepartmentoflaborandindustrialrelationsorthe
20attorneygeneralmaybringanactiononbehalfoftheworker,ortheworkermaybring
21aprivateaction,againsttheemployertoenforcethissubsection.Thecourtmayaward
22statutorydamagesofnotmorethanfivethousanddollarsperworkerperagreementfor
23eachviolationofthissubsection.
431.332.1.Achoiceoflawprovisionthatappliestoarestrictiveemployment
2agreementisprohibitedandunenforceableunlessitrequiresthatadisputearising
3undertheagreementbegovernedbythelawofthejurisdictionwheretheworker
4primarilyworksfortheemployeror,iftheworkrelationshiphasended,thejurisdiction
5wheretheworkerprimarilyworkedwhentherelationshipended.
6 2.Achoiceofvenueprovisionthatappliestoarestrictiveemployment
7agreementisprohibitedandunenforceableunlessitrequiresthatadisputearising
8undertheagreementbedecidedinajurisdictionwhere:
9 (1)Theworkerprimarilyworksor,iftheworkrelationshiphasended,a
10jurisdictionwheretheworkerprimarilyworkedwhentherelationshipended;or
11 (2)Theworkerresidesatthetimeofthedispute.
431.334.Inapplyingandconstruingthisuniformact,acourtshallconsiderthe
2promotionofuniformityofthelawamongjurisdictionsthatenactit.
431.338.1.Exceptasprovidedinthissection,sections431.300to431.338donot
2affectthevalidityofarestrictiveemploymentagreementineffectbeforeAugust28,
32024.
4 2.Theprovisionsofsubdivision(5)ofsubsection1ofsection431.306andsection
5431.308applytoarestrictiveemploymentagreemententeredintobefore,on,orafter
6August28,2024.
✔
HB2787 8