Section 11 Power of Court to Modify Limitation

• Library: Employer-Employee Law 2008

Missouri courts do not follow the “blue pencil” doctrine, which permits a court to “blue pencil” or strike out unreasonable words in a restrictive covenant, leaving a reasonable covenant. R.E. Harrington, Inc. v. Frick, 428 S.W.2d 945, 951 (Mo. App. E.D. 1968). Missouri courts have always refused to enforce totally unreasonable contracts for reasons of equity and common sense. Id.

But Missouri courts do have the right to modify and enforce unreasonable restrictions to the extent that they are reasonable, regardless of the covenant’s actual wording. Superior Gearbox Co. v. Edwards, 869 S.W.2d 239, 248–49 (Mo. App. S.D. 1993); Orchard Container Corp. v. Orchard, 601 S.W.2d 299, 303–04 (Mo. App. E.D. 1980); Mid-States Paint & Chem. Co. v. Herr, 746 S.W.2d 613 (Mo. App. E.D. 1988). The court is vested with broad discretionary power to shape and fashion the relief it grants—including the authority to craft an appropriate injunction—to fit the particular facts and equities. City of Bridgeton v. City of St. Louis, 18 S.W.3d 107, 114–15 (Mo. App. E.D. 2000).

Thus, a court can choose to modify a restrictive employment covenant and to enforce it only as to the time and geographic area the court deems reasonable Cont’l Research Corp. v. Scholz, 595 S.W.2d 396 (Mo. App. E.D. 1980). In AEE-EMF, Inc. v. Passmore, 906 S.W.2d 714 (Mo. App. W.D. 1995), the court enforced the restrictive employment covenant but reduced the time from 5 years to 3 years while recognizing the defendant’s status as a cofounder and 50% shareholder in the company.

7. (§17.12) Requirement That Restriction Must Relate to Legitimate Proprietary Right of Employer

To successfully enforce a restrictive employment covenant, the employer must have a legitimate proprietary interest to protect. Herrington v. Hall, 624 S.W.2d 148, 151 (Mo. App. W.D. 1981). The requirement is reaffirmed in Ballesteros v. Johnson, 812 S.W.2d 217, 223 (Mo. App. E.D. 1991). Penalizing employees for leaving the company is not a legitimate interest. Cape Mobile Home Mart, Inc. v. Mobley, 780 S.W.2d 116, 118 (Mo. App. E.D. 1989).

Section 431.202.1(3), RSMo Supp. 2007, provides that a covenant is enforceable if it seeks to protect either:

• “[c]onfidential or trade secret business information; or”
• “[c]ustomer or supplier relationships, goodwill or loyalty.”

1. (§17.13) Customer Contacts

Customer contacts are defined as “the influence an employee acquires over his employer’s customers through personal contact.” Schmersahl...