North Dakota Non-Compete Agreement Overview
Non-Competes Are Banned in North Dakota
North Dakota 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.
North Dakota bans non-compete agreements for employees under Section 9-08-06 of the North Dakota Century Code. The statute provides that every contract by which anyone is restrained from exercising a lawful profession, trade, or business of any kind is void. This prohibition is broadly interpreted by North Dakota courts to cover virtually all forms of employment-related non-compete restrictions.
The only exception to North Dakota's ban is for non-competes entered into in connection with the sale of a business goodwill or of all ownership interest in a business entity. In these contexts, the seller may agree not to compete within a specified geographic area for a reasonable time. North Dakota courts have also recognized that non-solicitation agreements and non-disclosure agreements are distinct from non-competes and may be enforceable, provided they do not function as de facto non-compete restrictions.
Banned
Enforceability
N/A — Non-competes are void
Max duration
N/A
Blue-pencil
N/A
Consideration
North Dakota Enforceability Requirements
North Dakota prohibits most non-compete agreements. However, understanding what is and is not permitted helps employers and employees navigate the state's restrictions.
Key Provisions
- Employee non-competes are VOID under N.D.C.C. Section 9-08-06
- Employers CANNOT restrict employees from working in their profession after leaving
- Exception: sale of business goodwill or all ownership interest in a business
- Non-solicitation and non-disclosure agreements may be enforceable if narrow
- Courts broadly interpret the prohibition to cover all forms of employment competition restrictions
Alternatives to Non-Competes in North Dakota
Since North Dakota 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 North Dakota.
Implement Non-Solicitation Agreements
Non-solicitation agreements prevent former employees from soliciting your clients or recruiting your employees. These are generally enforceable in North Dakota 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 North Dakota. 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 North Dakota
North Dakota's prohibition has been long-standing. No significant recent legislative changes have been made to the state's non-compete law.
Employer Tips for North Dakota
Do not use non-compete agreements in North Dakota. Focus on NDAs, non-solicitation agreements, and trade secret protections instead.
Employee Rights in North Dakota
North Dakota employees are protected from non-compete restrictions. If your employer asks you to sign one, it is void under state law. Consult an attorney if your employer attempts enforcement.
Sample North Dakota Non-Compete Agreement
Below is a preview of our North Dakota-specific non-compete agreement. Your customized document will include all provisions required for enforceability in North Dakota.
NON-COMPETE AGREEMENT
STATE OF NORTH DAKOTA
Covenant Not to Compete
EMPLOYER:
Company Name: [Legal Entity Name]
Address: [North Dakota 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 North Dakota
North Dakota Non-Compete Agreement FAQ
Answers to common questions about non-compete agreements in North Dakota, including enforceability, duration limits, and employee rights.
Official North Dakota Resources
Use these official resources to verify North Dakota non-compete enforceability rules and access state employment law information.
North Dakota Department of Labor
State labor law information and employment resources
North Dakota 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 North Dakota Documents
Depending on your situation, you may need additional documents alongside your North Dakota non-compete agreement.
North Dakota Non-Disclosure Agreement
Protect confidential information and trade secrets
North Dakota Non-Solicitation Agreement
Prevent poaching of clients and employees
North Dakota Employment Agreement
Comprehensive employment terms and conditions
North Dakota Severance Agreement
Separation terms with non-compete provisions
Create your North Dakota Non Compete Agreement in under 5 minutes.
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