Dive Brief:

• When it comes to noncompete agreements, the 8th U.S. Circuit Court of Appeals has overturned a lower court and ruled that they are transferrable under certain conditions in an M&A scenario, SHRM reports.
• If the noncompetes are signed by former employees of a business acquired by another and are not personal services contracts, they are enforceable by a purchasing company under Missouri law, according to the court.
• In the facts of the case, a pair of mobile X-ray technicians had worked for Ozark Mobile Imaging and it was sold to Mobilex. After rejecting employment offers from Mobilex, the pair went to work for a competitor. Mobilex sued the two to enforce the non-compete and confidentiality agreements they had signed when they were working at Ozark Mobile. 

Dive Insight:

In the case, the U.S. District Court for the Western District of Missouri initially ruled for the employees, saying a personal services contract "cannot be assigned to a subsequent employer under Missouri law without the employee's contemporaneous consent," SHRM reported. But the 8th Circuit reversed, noting that that the Missouri Supreme Court probably "would follow the majority rule among states that noncompetes are assignable contractual obligations that do not require the employee's contemporaneous consent."

The enforceability of noncompete agreements requires a state-specific analysis, according to the SHRM article. Employers, especially multi-state employers, can't take for granted that a noncompete agreement that is enforceable in one state is necessarily enforceable in another state.