May 7, 2014. Employers may require new employees to sign non-competition agreements as a condition of new employment. Employers may also require current employees to sign a non-competition agreement to continue their employment. A recent Missouri Court of Appeals case is instructive for other states. In Darr v. Roberts Marketing Group, LLC, No. 13-07274R-A (Mo. Ct. App. Apr. 22, 2014), a marketing firm presented all of its employees with a non-competition agreement. The employees were told they would be fired if they refused, and were given less than a week to sign. The non-competition agreement spanned the nation and could be enforceable for 6 years. In addition, the employee would be required to waive defenses in future litigation and his right to a jury trial.
One 3-month employee attempted to negotiate the terms of the agreement, but the firm remained firm. He ultimately refused to sign, and then resigned. The Missouri Appellate Court ruled that the agreement was so restrictive that a reasonably prudent person would be justified in refusing to agree to be bound by its terms and awarded the employee unemployment benefits. The Court hinted that the non-competition agreement’s terms may be unenforceable. The apparent problems in this case were: (1) the non-competition agreement was too broad and restrictive, (2) the employer did not provide the employee time to review the agreement and permit him to have his attorney review it. In that case, the court found that good cause existed for the employee to refuse to sign the agreement and granted unemployment benefits.
For more information about employment law and non-competes, contact the Goosmann Law Firm at info@goosmannlaw.com or call 712-226-4000.
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