Minnesota Non-Compete Agreement Overview
Non-Competes Are Banned in Minnesota
Minnesota prohibits non-compete agreements for employees. Any such agreement is void and unenforceable under state law. The only exception is non-competes entered into in connection with the sale of a business. Employers should use non-disclosure agreements (NDAs) and non-solicitation agreements instead.
Minnesota banned most non-compete agreements effective July 1, 2023, under Minnesota Statutes Section 181.988. The law prohibits employers from requiring employees or independent contractors to agree to a covenant not to compete. Minnesota joined California, Oklahoma, and North Dakota as one of only four states with a near-complete ban on employee non-competes.
Minnesota's ban applies to all agreements entered into on or after July 1, 2023. Agreements signed before that date remain governed by prior law, which generally enforced reasonable non-competes. The ban includes narrow exceptions for non-competes during the sale of a business and for certain dissociation events from a business. Non-solicitation agreements and non-disclosure agreements remain enforceable and are not affected by the ban. Employers should review all existing agreements and cease requiring non-competes for new hires.
Banned
Enforceability
N/A — Non-competes are void
Max duration
N/A
Blue-pencil
N/A
Consideration
Minnesota Enforceability Requirements
Minnesota prohibits most non-compete agreements. However, understanding what is and is not permitted helps employers and employees navigate the state's restrictions.
Key Provisions
- Non-compete agreements are VOID for agreements entered on or after July 1, 2023 (Minn. Stat. Section 181.988)
- Applies to both employees and independent contractors
- Pre-July 2023 agreements may still be enforceable under prior law
- Exceptions: sale of a business, dissociation from a business
- Non-solicitation and non-disclosure agreements are NOT affected by the ban
- Choice-of-law provisions cannot be used to circumvent the ban for Minnesota workers
Alternatives to Non-Competes in Minnesota
Since Minnesota bans non-competes, employers should use these alternative restrictive covenants to protect their business interests.
Use Non-Disclosure Agreements
Draft comprehensive NDAs to protect trade secrets, confidential information, and proprietary business data. NDAs are enforceable in all 50 states including Minnesota.
Implement Non-Solicitation Agreements
Non-solicitation agreements prevent former employees from soliciting your clients or recruiting your employees. These are generally enforceable in Minnesota when reasonable in scope.
Strengthen Trade Secret Protections
Leverage the Uniform Trade Secrets Act and the federal Defend Trade Secrets Act to protect proprietary information through legal action rather than restrictive covenants.
Use Confidentiality Agreements
Confidentiality agreements protect specific categories of proprietary information and are enforceable in Minnesota. They offer strong protection without restricting where the employee can work.
Document Intellectual Property Ownership
Use invention assignment agreements and work-for-hire clauses to ensure the company owns all intellectual property created during the employment relationship.
Recent Legal Changes in Minnesota
The non-compete ban was enacted in 2023 and took effect July 1, 2023. This was a major change — Minnesota previously enforced reasonable non-competes. Employers must ensure all post-July 2023 agreements comply with the new law.
Employer Tips for Minnesota
Do not include non-compete clauses in any agreements with Minnesota-based employees or contractors. Use non-solicitation agreements and NDAs instead. Review existing agreements to identify any pre-July 2023 non-competes that may still be enforceable.
Employee Rights in Minnesota
If you signed a non-compete after July 1, 2023 in Minnesota, it is void. Pre-July 2023 agreements may still be enforceable but are subject to traditional reasonableness analysis. Consult an employment attorney to evaluate your specific situation.
Sample Minnesota Non-Compete Agreement
Below is a preview of our Minnesota-specific non-compete agreement. Your customized document will include all provisions required for enforceability in Minnesota.
NON-COMPETE AGREEMENT
STATE OF MINNESOTA
Covenant Not to Compete
EMPLOYER:
Company Name: [Legal Entity Name]
Address: [Minnesota Address]
Business Type: [Industry]
EMPLOYEE:
Name: [Full Legal Name]
Position: [Job Title]
Start Date: [Date]
NON-COMPETE TERMS
Restricted Activities: [Specific Activities]
Geographic Scope: [Area]
Duration: [Time Period] following termination
Consideration: [What Employee Receives]
Governing Law: State of Minnesota
Minnesota Non-Compete Agreement FAQ
Answers to common questions about non-compete agreements in Minnesota, including enforceability, duration limits, and employee rights.
Official Minnesota Resources
Use these official resources to verify Minnesota non-compete enforceability rules and access state employment law information.
Minnesota Department of Labor
State labor law information and employment resources
Minnesota Attorney General
Consumer protection and employment law guidance
FTC Non-Compete Rulemaking
Federal non-compete rule status and developments
ABA Labor and Employment Law
American Bar Association employment law resources
Related Minnesota Documents
Depending on your situation, you may need additional documents alongside your Minnesota non-compete agreement.
Minnesota Non-Disclosure Agreement
Protect confidential information and trade secrets
Minnesota Non-Solicitation Agreement
Prevent poaching of clients and employees
Minnesota Employment Agreement
Comprehensive employment terms and conditions
Minnesota Severance Agreement
Separation terms with non-compete provisions
Create your Minnesota Non Compete Agreement in under 5 minutes.
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