Contract With Restrictive Covenants In Minnesota
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“The law has no retroactive effect, which is a positive because it didn't unwind existing agreements,” he said. Because the law applied only going forward, the advice he gives to companies differs based on when an employment agreement was signed — August 2022 versus August 2023. There are a few exceptions to the ban.
In Minnesota, the new law prohibits enforcement of non-competes entered into after July 1, 2023, but leaves existing agreements in place for the nearly 300,000 Minnesotans we estimate had a non-compete before the law passed.
Key Takeaways Under Minnesota State Law: Businesses should not use non-compete agreements for their employees and should not be including non-compete language in their employee handbook or onboarding processes anymore.
Protecting proprietary information through employee NDAs is not only a best practice but also a legal necessity for businesses in Minnesota.
Minnesota Statute § 181.9881 — Restrictive Employment Covenants; Void in Service Contracts — prohibits on a go-forward basis service providers from restricting “in any way a customer from directly or indirectly soliciting or hiring an employee of a service provider.” The law is not limited to just employees, but also ...
How do I challenge a restrictive covenant? Express release: It may be possible to negotiate the release or variation of a restrictive covenant. Indemnity insurance: It is possible to obtain indemnity insurance to protect against the risk of a person with the benefit of a restrictive covenant seeking to enforce it.
Noncompetes banned: Noncompete and restrictive-franchise provisions in nearly all employee agreements are banned. (both already in effect). The 2024 legislative session went further and banned restrictive employment covenants in service contracts.
