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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.

woman signing contract

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.