February 2021
Missouri Representative Fitzwater introduces “Right to Start” legislation, seeking to ban non-compete agreements
Clinton Turley

On February 19, 2021, Representative Fitzwater introduced HB 1202 which, in part, seeks to completely ban non-compete agreements. The text of the proposed legislation is as follows:

 

431.203. 1. For purposes of this section, the term "covenant not to compete" means an agreement, understanding, contract, or contractual term in which an employee or prospective employee agrees not to compete against an employer or prospective employer or agrees not to accept any positions with a competitor of an employer or prospective employer following the termination of a business or employment relationship between the employee or prospective employee and the employer or prospective employer. A covenant not to compete may, but need not, contain time-based or geographic limitations.

 

2. Notwithstanding any provision of section 431.202 or any other provision of law to the contrary, beginning the effective date of this section, a covenant not to compete shall be void and unenforceable.

 

On March 9, 2021, the Committee on Economic Development amended subparagraph two of the proposed legislation, narrowing the ban to only apply to employees or prospective employees who receive $90,000.00 or less in income from the employer or prospective employer:

 

2. Notwithstanding any provision of section 431.202 or any other provision of law to the contrary, beginning the effective date of this section, a covenant not to compete created after the effective date of this section shall be void and unenforceable if an employee or prospective employee receives ninety thousand dollars or less in income from such employer or prospective employer.

 

HB 1202 has now been referred to the Committee on Rules – Legislative Oversight. As of March 18, 2021, it has not been set for any additional hearing or calendar action. If enacted, the proposed effective date is August 28, 2021.