On April 8, 2025, Kansas Governor Laura Kelly signed Senate Bill 241 (SB 241) into law, amending the Kansas Restraint of Trade Act (K.S.A. 50-163). Taking effect on July 1, 2025, this new employer-friendly legislation clarifies the enforceability of customer and employee non-solicitation covenants in Kansas. Under the new law, customer and employee non-solicitation agreements that meet specific requirements are presumed valid and enforceable. This new law also mandates courts to modify overbroad restrictive covenants. SB 241 expressly does not apply to non-competition covenants—meaning it does not affect the enforceability of traditional non-competes, which continue to be governed by existing law.
Background
Employers often utilize restrictive covenant agreements with employees to safeguard their goodwill, trade secrets, customer contacts and customer relationships, and other legitimate business interests. In the employment context, employers frequently use customer and employee non-solicitation covenants, which prohibits an employee from soliciting the customers and employees during the term of the employee’s employment and for a specified period of time after the employment relationship ends. Previously, Kansas did not have any state statute that specifically governs the enforceability of non-solicitation covenants. Kansas courts have established case law outlining when non-solicitation covenants are considered reasonable and enforceable. Additionally, while many states are taking steps to outright ban certain restrictive covenants, Kansas is arguably taking steps in the opposite direction.
What the New Law Says
1. Enforceable Non-Solicitation Covenants with Employees
Under SB 241, customer and employee non-solicitation covenants with employees that meet certain requirements are “conclusively presumed to be enforceable.”
a. Customer Non-Solicitation
SB 241 provides that a written non-solicitation covenant in which an employee agrees not to solicit the employer’s customers shall be “conclusively presumed to be enforceable” if “the covenant is limited to material contact customers and . . . does not continue for more than two years following the end of the employee’s employment with the employer.”
“Material contact customers” is defined as “any customer or prospective customer” (1) that is “solicited, produced or serviced, directly or indirectly,” by the employee or (2) about whom the employee, “directly or indirectly, had confidential business or proprietary information or trade secrets” in the course of the employee’s relationship with the customer. This is a broad definition that will cover much of what an employer seeks to protect in a customer non-solicitation clause.
b. Employee Non-Solicitation
SB 241 also provides that a written non-solicitation covenant in which an employee agrees not to solicit other employees shall be “conclusively presumed to be enforceable” where it: (a) “[s]eeks, on the part of the employer, to protect confidential or trade secret business information or customer or supplier relationships, goodwill or loyalty”; or (2) “does not continue for more than two years following the employee’s employment.”
2. Restrictions Related to Owners (or Sellers) of a Business
SB 241 also includes very similar provisions for “owners” in the sale-of-business context.
- A written covenant in which an owner agrees not to solicit customers is “conclusively presumed to be enforceable” if “the covenant 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.”
- A written covenant in which an owner agrees not to solicit employees or owners is “conclusively presumed to be enforceable” if “the covenant does not continue for more than four years following the end of the owner’s business relationship with the business entity.”
An “owner” is broadly defined to mean “a current or former owner or seller of all or any part of the assets of a business entity or any interest in a business entity, including, but not limited to, a partnership interest, a membership interest in a limited liability company or a series limited liability company or any other equity interest or ownership interest.”
3. Mandatory Reformation
For covenants that are not presumed to be enforceable and are determined to be overbroad or otherwise not reasonably necessary to protect a business entity’s legitimate business interest, Kansas courts are mandated by SB 241 to “modify the covenant, enforce the covenant as modified and grant only the relief reasonably necessary to protect such interests.”
Next Steps
Kansas employers may want to review and update their restrictive covenant agreements to benefit from the favorable presumptions created by the new law. For example, employers may want to check if the “material contact customers” language has been incorporated into the customer non-solicitation covenants, and to assess the temporal limitations applied to the customer and employee non-solicitation covenants.
Written with the assistance of Kyunghee Moon, a summer associate in Husch Blackwell’s Kansas City office.