Kansas: Amendments to Restraint of Trade Act

/in

APPLIES TO

All Employers with Employees in KS

EFFECTIVE

July 1, 2025

QUESTIONS?

Contact HR On-Call

(888) 378-2456
Quick Look

  • SB 241 provides new enforceability presumptions and mandates judicial modification of overly broad restrictive covenants and agreements.

Discussion

As of July 1, 2025, SB 241 amends Kansas’ Restraint of Trade Act to provide clearer standards for enforceability and to reduce the uncertainty that previously surrounded non-compete and non-solicitation clauses. Under the prior version of the law, restrictive covenants were presumed enforceable if they were “reasonable in view of all the facts and circumstances” and did not violate public welfare. However, the open-ended nature of the reasonableness test left much discretion to judges, often making it difficult for employers to predict whether a covenant would ultimately be upheld.

 

SB 241 addresses this problem by introducing two key changes. First, the law sets out specific scenarios in which certain restrictive covenants will be presumed enforceable, most notably, for non-solicitation agreements and provisions requiring an owner to give advance notice before selling or transferring their ownership stake. To qualify, covenants must meet specific scope and duration limits, including coverage of “material contact customers” and defined relationships between parties.

 

Second, the law provides a backstop for overly broad covenants that do not qualify for one of the new presumptions. Rather than striking those covenants down entirely, courts are now required to modify them, but only to the extent reasonably necessary to protect the employer’s legitimate business interests.

 

While the updates under SB 241 offer a more reliable legal framework for Kansas businesses seeking to enforce post-employment restrictions, these types of agreements are still subject to challenges in court and courts will consider defenses raised by employees. Employers should work with their legal counsel to ensure that any restrictive covenant or agreement is in compliance with these updated requirements.

 

Action Items

  1. Review restrictive covenants and agreements with legal counsel.

 

 

Disclaimer: This document is designed to provide general information and guidance concerning employment-related issues. It is presented with the understanding that ManagEase is not engaged in rendering any legal opinions. If a legal opinion is needed, please contact the services of your own legal adviser. © 2025 ManagEase