Void for employees

Non-compete law in Minnesota

For agreements entered into on or after July 1, 2023, any covenant not to compete in an employment or contractor agreement is void and unenforceable, except one agreed in a sale of a business or in anticipation of dissolving a business. Employers also may not require Minnesota-based employees to litigate elsewhere or give up Minnesota law, and a court may award the employee attorney fees.

Last verified · confidence high. Clauseworthy is not a law firm and does not give legal advice.

Employee non-competes
Void by statute
Pay floor
None in the statute

Exceptions and special rules

  • Sale of a business: the statute allows a non-compete given by a seller.
  • Covenant agreed upon in anticipation of dissolving a partnership, LLC or corporation, within a reasonable geographic area (§ 181.988 subd. 2(b)(2))
  • Definition excludes nondisclosure agreements, trade-secret/confidential-information agreements, and nonsolicitation or client/contact-list restrictions (subd. 1(a))
  • 'Employee' includes independent contractors (subd. 1(c))

Non-solicitation clauses

Not a 'covenant not to compete': agreements restricting solicitation of the employer's customers, or use of client/contact lists, are excluded from the definition (§ 181.988 subd. 1(a)).

Contracts naming another state's law

Employer must not require an employee who primarily resides and works in Minnesota to adjudicate (litigate or arbitrate) a Minnesota-arising claim elsewhere or to give up Minnesota law; violating provisions are voidable by the employee and, if voided, Minnesota law and forum govern (subd. 3). Subdivision 3 applies only to claims arising under § 181.988 (subd. 3(e)).

Remedies

In addition to injunctive relief and other remedies, a court may award reasonable attorney fees to an employee enforcing subd. 2 or subd. 3 rights (subd. 2(d), 3(c)). A void covenant does not void other provisions of the contract (subd. 2(c)).

Which agreements it covers

Effective July 1, 2023; applies to contracts and agreements entered into on or after that date (2023 c 53 art 6 s 1 effective-date clause). Earlier covenants remain governed by prior law.

Recent changes

  • 2023-07-01. Minn. Stat. § 181.988 took effect (2023 c 53 art. 6 s. 1); applies to agreements entered on/after this date. Source

Primary sources

Checker

What the statute says for these facts

Four facts. The answer leads with what the statute does at that pay, then names any change already enacted, then quotes the details with their citations.

The person who would sign

Several statutes treat contractors differently.

Other states on file