Kansas has amended the state’s Restraint of Trade Act, providing that restrictive covenants in certain contracts are enforceable and not considered a restraint of trade in certain circumstances.
Specifically, the amended law states that a covenant in writing in which an employee of a business entity agrees to not solicit, recruit, induce, persuade, encourage, direct or otherwise interfere with, directly or indirectly, one or more employees or owners of a business entity for the purpose of interfering with the employment or ownership relationship of such employees or owners will be conclusively presumed to be enforceable and not a restraint of trade if the covenant is between an employer and one or more employees and the covenant:
- Seeks, on the part of the employer, to protect confidential or trade secret business information or customer or supplier relationships, goodwill or loyalty; or
- does not continue for more than two years following the employee’s employment.
Additionally, the amended law states that a covenant in writing in which an employee agrees not to solicit, recruit, induce, persuade, encourage, direct or otherwise interfere with, directly or indirectly, a business entity’s customers, including any reduction, termination, acceptance or transfer of any customer’s business, in whole or in part, for the purpose of providing any product or service that is competitive with those provided by the employer will be conclusively presumed to be enforceable and not a restraint of trade 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.
“Material contact customer” means any customer or prospective customer that is solicited, produced or serviced, directly or indirectly, by the employee or owner at issue or any customer or prospective customer about whom the employee or owner, directly or indirectly, had confidential business or proprietary information or trade secrets in the course of the employee’s or owner’s relationship with the customer.
The law is effective July 1, 2025.
