Symphony Diagnostic Serv. v. Greenbaum, No. 15-2294 (8th Cir. 2016)
Annotate this CaseAfter Ozark was sold to Mobilex, Mobilex filed suit against defendant to enforce the non-compete and confidentiality agreements defendants had signed with Ozark. The district court granted summary judgment to defendants on the basis that a personal services contract cannot be assigned to a subsequent employer under Missouri law without the employee’s contemporaneous consent. The court adopted the majority rule and held that covenants not to compete can be assigned to a successor employer without contemporaneous consent. In this case, the non-compete agreements precluded only working in the field of medical diagnostics or soliciting business from certain clients within a specified geographical area. A reasonable jury, looking at the facts in the record, could find that defendants did not agree to the non-compete and confidentiality agreements because of Ozark’s unique characteristics. Because the court found that the non-compete and confidentiality agreements at issue here were not personal services contracts and could be assigned without the consent of defendants, the court reversed and remanded for further proceedings.
Court Description: Kelly, Author, with Loken and Gruender, Circuit Judges] Civil case - Employment Contracts. The court predicts the Missouri Supreme Court would adopt the majority rule and permit assignments of covenants not to compete and confidentiality agreements to a successor employer without contemporaneous employee consent; the district court erred in granting the employees summary judgment based on its conclusion that the agreements were personal services contacts which could be assigned only with the employee's contemporaneous consent; remanded for further proceedings.
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