Employer Law Blog

Timm Schowalter

Recently, the United States District Court for the Western District of Missouri addressed whether non-compete agreements are automatically assignable in an asset purchase. The court found the agreements to be unenforceable on account of the employees who signed them had not contemporaneously assented to their assignment when their employer sold its assets to another company. Symphony Diagnostic Services No. 1, Inc. d/b/a MobileXUSA v. Greenbaum, No. 13-4196 (W.D. Mo. March 16, 2015). In MobileXUSA, the determinative fact was the agreements did not have an assignment clause allowing an employer to freely assign the agreements to a subsequent company.

In settling an existing charge of discrimination, administrative complaint or lawsuit, employers, upon advice of counsel, routinely obtain a release of all claims from the employee. This includes releasing any claims already asserted and any other potential claims the employee could assert in the future. Employers also utilize severance agreements as a means of minimizing litigation by obtaining a release of all claims from a departing employee when offering severance to the employee.