Minnesota's Ban on Non-Compete Agreements: What Employees and Employers Need to Know

Minnesota is about to ban almost all non-compete agreements, which prevent employees from working for competitors after leaving a job. This change will make Minnesota the fourth state to declare such agreements unenforceable by law, along with California, North Dakota, and Oklahoma.

Here's what employees and employers need to know:

Broad Scope

The proposed law will ban all non-compete agreements, whether relating to an employee or an independent contractor. Unlike laws in other states, it doesn't matter how much the employee earns; the ban is absolute.

Limited Exceptions

Only two exceptions exist to this ban. One is related to the sale of a business and the other concerns the dissolution of a business partnership or entity. In all other circumstances, non-compete agreements will be void and unenforceable.

Impact on Other Agreements

This proposed law will not invalidate your entire contract if it contains a non-compete clause; only the non-compete provision will be void.

Non-Solicitation and Confidentiality Agreements Still Valid

While non-compete clauses will be banned, non-solicitation and confidentiality agreements remain enforceable. These protect the company's customer relationships and confidential information.

Non-Minnesota Legal Clauses

Employers cannot avoid the impact of this law by requiring employees residing and working in Minnesota to agree to choice-of-law provisions that favor the law of another state.