Non-Compete Agreement Lawyers in Minneapolis

Some companies require job applicants or employees to sign non-compete agreements. While sometimes these may be enforceable, other times they are not. Don’t let an employer hold you to an unenforceable and overly restrictive non-compete agreement.

Contact our attorneys for help.

What Do Non-Compete Agreements Include?

A non-compete agreement (NCA) typically restricts an employee from working for competing companies during and for a limited time after their employment ends. Whether a particular NCA is enforceable will depend on the conditions under which it was signed. If the employer does not offer the employee something of value to sign the NCA, it is likely invalid. But in some jurisdictions, if an employer offers an employee something of value in exchange for signing an NCA—such as an offer of employment— and the agreement is reasonable, courts may enforce it.

In Minnesota, almost all post-termination NCAs between employers and their employees entered into on or after July 1, 2023 are prohibited by law. However, the prohibition will not apply retroactively to NCAs signed before this date so NCAs entered into before July 1, 2023, may still be enforceable.

The new statute, passed in Minnesota in 2023, prohibits employers in the State from restricting the employee in the following ways after termination of employment:​

(1) Working for another employer for a specified period of time;​

(2) Working in a specified geographical area; or​

(3) Working for another employer in a capacity that is similar to the employee's work for​ the employer that is party to the agreement.

The statute covers all employees and independent contractors, regardless of their compensation level. The law also provides that employers may not avoid the law by requiring an employee or independent contractor that primarily resides and works in Minnesota to agree to apply another state’s non-compete law or to litigate or arbitrate disputes in another state.

There are several exceptions to the scope of the law. Non-competition provisions based on the sale of a business are still valid. Employers are still allowed to enforce non-solicitation agreements, such as restricting a former employee from soliciting company customers or company employees, or using client or contact lists. Employers may also continue to enforce non-disclosure agreements prohibiting disclosure of confidential company information, such as manufacturing processes, customer lists, trade secrets, and financial information. The scope of these agreements, however, will be limited to information learned while working for the employer. They cannot prevent former employees from sharing or using information learned outside the employment relationship. Further, employers may not use these sorts of restrictive covenants to block employees or former employees from reporting illegal activity.

In jurisdictions outside of Minnesota, NCAs can be unreasonable if they are illegal, contrary to public policy, or not necessary to protect the employer’s business. Terms that run into problems often involve how long the restrictions are supposed to last or how broad the geographic restrictions are. The longer an NCA lasts and the larger the geographic area, the more likely it is to be unreasonable. If an NCA is unreasonable, a court might rule the entire agreement invalid. In other circumstances, the court might modify a particular term to make it reasonable. Moreover, if an employee is fired, or if the employee quits after being asked to do something illegal, the agreement may not be enforceable. NCAs signed in Minnesota before July 1, 2023, may be also unenforceable for any of those same reasons.

Concerns Regarding Non-Compete Agreements

In Minnesota, employers are prohibited from asking you to sign an NCA for any reason after July 1, 2023.

Examples of potential non-compete issues in States that still allow NCAs may include:

• Your employer asks you to sign an NCA after you have started employment without offering you anything more than continued employment and later seeks to enforce the agreement.
• You sign an NCA that prohibits you from working for competitors of your employer for 10 years after leaving employment, and your employer seeks to enforce the agreement.
• You sign an NCA that prohibits you from working in the same industry as your employer anywhere in the country, and your employer seeks to enforce the agreement.

Call (877) 344-4628 now to discuss having your non-compete agreement reviewed by one of our experienced attorneys.