The Missouri Chamber of Commerce and Industry recently testified in favor of legislation that deals with the sale of businesses.
SB 367 is sponsored by Sen. Tony Luetkemeyer (R-Parkville). Sen. Luetkemeyer explained in committee that the bill protects businesses against the solicitation of employees and customers of a business by a former owner of the business. It does not govern the conduct of employees of the business, and the bill only protects against the solicitation of employees and customers in a business.
“This is not a non-compete, and it does not prohibit anyone from working for a competing business,” Sen. Luetkemeyer said during a recent hearing of the Senate Judiciary and Civil and Criminal Jurisprudence Committee, which he chairs. “This is a non-solicitation and only as it relates to the sale of a business.”
Furthermore, a written provision by which an owner promises to provide notice of termination, selling, or otherwise disposing of ownership in the business shall be presumed to be enforceable and not a restraint of trade.
“This is not about non-competes, because I know those conversations can get a bit touchy,” said Heidi Sutherland, director of legislative affairs for the Missouri Chamber of Commerce and Industry. “This is purely to protect businesses and the customer base and workforce that they cultivate.”
Rep. Bill Hardwick (R-Waynesville) is sponsoring companion legislation in the House (HB 902). During testimony before the House Judiciary Committee, Rep. Hardwick said this is the third time he has presented this legislation.
“We re-worked the bill and identified a lot of issues and negotiated new language,” Rep. Hardwick said.
Testifying in support of the bill was Ryan O’Grady of Lockton Companies. O’Grady said Lockton supported the legislation because, “It is pro-business for Missouri. It provides a presumption of enforceability for restrictive covenant provisions solely within the sale of business context. This is sophisticated, negotiated, arm’s length transactions between owners of businesses – not between employees of a company.”