Section 13 Customer Contacts

• Library: Employer-Employee Law 2008

Customer contacts are defined as “the influence an employee acquires over his employer’s customers through personal contact.” Schmersahl, Treloar & Co., P.C. v. McHugh, 28 S.W.3d 345, 349 (Mo. App. E.D. 2000); Healthcare Servs. of the Ozarks, Inc. v. Copeland, 198 S.W.3d 604, 611 (Mo. banc 2006). Courts that are evaluating whether a covenant is reasonable as it relates to customer contacts look to the quality, frequency, and duration of an employee’s exposure to the customers. Washington County Mem’l Hosp. v. Sidebottom, 7 S.W.3d 542, 545 (Mo. App. E.D. 1999).

Missouri courts have historically held that an employer has a proprietary right to its customer accounts and their goodwill. Mills v. Murray, 472 S.W.2d 6, 12 (Mo. App. W.D. 1971); Cont’l Research Corp. v. Scholz, 595 S.W.2d 396, 400, 401 (Mo. App. E.D. 1980). If the employer has customers who regularly patronize its business, there is a stock of customers protectable by a noncompetition agreement. Silvers, Asher, Sher & McLaren, M.D.s Neurology, P.C. v. Batchu, 16 S.W.3d 340, 345 (Mo. App. W.D. 2000). A “customer” is one who repeatedly has business dealings with a particular tradesperson or business. Empire Gas Corp. v. Graham, 654 S.W.2d 329, 330–31 (Mo. App. W.D. 1983). But customers do not include prospects. Id.

Numerous cases underscore the significance of an employer’s protectable interest in its customer contacts in actions to enforce covenants not to compete. Osage Glass, Inc. v. Donovan, 693 S.W.2d 71, 74–75 (Mo. banc 1985); Gelco Express Corp. v. Ashby, 689 S.W.2d 790, 796 (Mo. App. W.D. 1985)...