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Minnesota Passes Ban on Most Noncompete Agreements

by | Jan 9, 2024 | Small Business |

What Happened?

The Minnesota Legislature passed a law making any noncompete agreements agreed and entered into on or after July 1, 2023 void and unenforceable. This new law applies to non-profit organizations as well as for-profit businesses.

What does this mean?

The ban applies to all employees and independent contractor agreements, regardless of the person’s income. It prohibits agreements that restrict them from working for another business after termination of employment, including:

  • for a specified period of time;
  • in a specified geographic area, or
  • for another employer in a capacity similar to the employee’s work for employer party to the agreement.

The ban is not retroactive, and noncompetes entered into before July 1, 2023, are valid and enforceable. With that said, courts may still strike these older noncompetes down if they’re found to be unnecessarily restrictive.

If a noncompete provision is rendered unenforceable, the remaining contract is still valid and enforceable.

What can you still do?

You can still use noncompetes in the sale of a business, in anticipation of the dissolution of a business, and while the employee is working for you. Employees will still be subject to the following agreements:

  • Confidentiality;
  • Nondisclosure;
  • Trade Secret; and
  • Nonsolicitation

Call or text rb LEGAL today at (763) 582-1414 today with any questions or concerns regarding noncompetes and employee protections. We’re here to help you protect your business and navigate the shifting legal landscape.