Minnesota Non-Compete Agreement Lawyers

Non-compete agreements (NCAs) are commonly used by employers to prevent employees from joining competitors or starting their own businesses after leaving a company. These agreements can have a significant impact on your career, but their enforceability varies depending on several factors. If you are being asked to sign a non-compete agreement, or if you are already bound by one, it's essential to understand your rights and whether the agreement is enforceable.

Contact our Minnesota non-compete agreement attorneys for help.

What Do Non-Compete Agreements Include?

A non-compete agreement typically restricts an employee from engaging in similar work for a competing company after their employment ends. The restrictions may cover:

1. Time: A specific duration for which the employee is prohibited from working with competitors.
2. Geographical area: A defined geographic location where the employee is not allowed to work for a competitor.
3. Job position: Restrictions on the employee taking a similar role with a competing business.

However, the enforceability of an NCA depends on a number of factors, including whether the agreement is reasonable in terms of time, geography, and scope. In Minnesota, the legality of these agreements has been impacted by new state laws.

New Minnesota Law on Non-Compete Agreements

As of July 1, 2023, Minnesota law prohibits most non-compete agreements for employment contracts. This means that nearly all post-termination non-compete clauses for employees or independent contractors that are entered into after this date are void. Employers can no longer restrict employees in the following ways:

1. Working for another employer: Employers cannot prevent employees from working for other companies after they leave.
2. Geographical limitations: Employers cannot restrict employees from working in a specific geographic area.
3. Job limitations: Employers cannot restrict former employees from working in a similar role for another company.

This new law applies to all employees and independent contractors, regardless of their compensation level. Importantly, the law also ensures that employers cannot circumvent the state’s regulations by asking employees to sign agreements that are governed by the laws of other states, or by requiring out-of-state litigation or arbitration.

However, this new statute does not apply to non-compete agreements signed before July 1, 2023, which may still be enforceable under previous laws.

Exceptions to the Minnesota Non-Compete Law

There are exceptions to the new Minnesota law that allow certain restrictive agreements to remain enforceable. These include:

• Non-compete provisions related to the sale of a business: If you sell a business and agree not to compete with the new owner, these provisions remain valid.
• Non-solicitation agreements: Employers can enforce agreements that prevent former employees from soliciting customers, clients, or employees of the company.
• Non-disclosure agreements (NDAs): Employers can enforce NDAs that protect sensitive business information like trade secrets, financial data, and proprietary processes. These agreements are limited to protecting confidential information learned during employment and cannot prevent employees from sharing information obtained elsewhere.

Additionally, employers cannot use restrictive covenants to prevent employees or former employees from reporting illegal activities or participating in whistleblower actions.

Enforceability of Non-Compete Agreements in Other Jurisdictions

While Minnesota has enacted strong restrictions, other states may still enforce non-compete agreements under certain circumstances. Courts in other jurisdictions typically evaluate the reasonableness of an NCA based on:

• Duration: How long the restrictions last after employment ends.
• Geographical scope: Whether the geographical restrictions are overly broad.
• Industry: Whether the restrictions are necessary to protect legitimate business interests, such as trade secrets or client relationships.

If an NCA is deemed overly broad, unreasonable, or unnecessary to protect the employer’s business, a court may rule the entire agreement invalid. In some cases, a court may modify specific terms to make the agreement more reasonable.

Additionally, non-compete agreements may not be enforceable if the employee was fired or resigned in response to illegal activities, unethical behavior, or other violations of the law.

Concerns Regarding Non-Compete Agreements in Minnesota

In Minnesota, non-compete agreements signed after July 1, 2023, are not enforceable. However, if you signed an NCA before this date, or if you are unsure about the agreement's enforceability, it is important to understand your legal options. Examples of potential issues with non-compete agreements that may arise in Minnesota or other states that still allow NCAs include:

• Unilateral Changes: If your employer asks you to sign an NCA after you have already started working without offering you something of value beyond continued employment, the agreement may be invalid.
• Unreasonable Duration: Non-compete agreements that restrict you from working in your field for many years—such as 10 years—may be deemed overly restrictive and unenforceable.
• Excessive Geographic Scope: An agreement that prohibits you from working in any city or state in the country, when your previous role only involved a limited region, may be seen as unreasonable.
• Limitations on Career Growth: Employers cannot use NCAs to block your career development in a way that’s unfair or unreasonable.

Call Our Minnesota Non-Compete Agreement Lawyer Today

If you have signed a non-compete agreement or are being asked to sign one, it’s crucial to understand its terms and whether it’s enforceable under Minnesota law. An experienced attorney can help you review the agreement, explain your options, and determine the best course of action.

Whether you're facing an unreasonable non-compete or need assistance with other employment-related matters, our team is here to protect your rights and help you navigate this complex area of law.

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