Kansas: Restricting Overbroad Protective Covenants
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APPLIES TO All Employers with Employees in KS |
EFFECTIVE July 1, 2025 |
QUESTIONS? Contact HR On-Call |
Quick Look
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Discussion:
Effective July 1, 2025, SB 241 amends the Kansas Restraint of Trade Act clarifying the types of agreements that are not intended to unreasonably restrain trade or commerce. There was prior confusion as to whether the Act also covered non-solicitation agreements. The amendment now clearly addresses non-solicitation agreements and also requires Kansas courts to modify unenforceable agreements and enforce the modification.
A written non-solicitation agreement is enforceable under the following circumstances.
- Business-to-Business Employee Interference. An owner agrees to not solicit, recruit, induce, persuade, encourage, direct or otherwise interfere with one or more employees or owners of a business entity for the purpose of interfering with their employment or ownership relationship, and the covenant does not continue for more than four years following the end of the owner’s business relationship with the business entity.
- Business Customer Interference. An owner agrees to not solicit, induce, persuade, encourage, service, direct or otherwise interfere with a business entity’s customers, including any reduction, termination, acceptance or transfer of any customer’s business for the purpose of providing any product or service that is competitive with those provided by the business entity and is limited to material contact customers, and the covenant does not continue for more than four years following the end of the owner’s business relationship with the business entity.
- Employee Protection of Trade Secrets. An employee of a business entity agrees to not solicit, recruit, induce, persuade, encourage, direct or otherwise interfere with one or more employees or owners of a business entity for the purpose of interfering with their employment or ownership relationship if the covenant is between an employer and one or more employees, and the covenant: (A) is not more than two years long, and (B) seeks to protect confidential or trade secret business information or customer or supplier relationships, goodwill, or loyalty.
- Employee Protection of Business Customers. An employee agrees not to solicit, recruit, induce, persuade, encourage, direct or otherwise interfere with a business entity’s customers, including any reduction, termination, acceptance or transfer of any customer’s business for the purpose of providing any product or service that is competitive with those provided by the employer if the covenant is limited to material contact customers and the covenant is between an employer and an employee and does not continue for more than two years following the end of the employee’s employment with the employer.
Kansas employers utilizing non-solicitation agreements should review and update them with legal counsel to ensure they are compliant with the amended requirements.
Action Items
- Review the bill here.
- Review non-solicitations with legal counsel for compliance.
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