Restrictive Covenant For Contract Work In Minnesota
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Protecting proprietary information through employee NDAs is not only a best practice but also a legal necessity for businesses in Minnesota.
There may be terms in your contract that says you can't work for a competitor or have contact with customers for a period of time after you leave the company. These are called 'restrictive covenants'. Your company could take you to court if you breach the restrictive covenants in your contract.
Although restrictive covenants have been prohibited in Minnesota since 1953, they still appear in real estate records across the country. In 2019, the Minnesota Legislature passed a law allowing people to renounce these covenants by filing a document with Minnesota counties.
Are discriminatory restrictive covenants illegal? Generally, yes. Since the United States Supreme Court's 1948 decision in the case Shelley v. Kraemer, restrictive covenants based on race have been unenforceableA contract will not be enforced by a court of law..
From a legal perspective, including NDAs in employment agreements in Minnesota strengthens the enforceability of confidentiality obligations. It provides a formal framework for outlining the scope of confidentiality and the consequences of violating the agreement.
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 ...
(a) Any covenant not to compete contained in a contract or agreement is void and unenforceable. (2) the covenant not to compete is agreed upon in anticipation of the dissolution of a business.
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.
On July 1, 2023, Minnesota joined the growing number of states prohibiting employment non-compete agreements, a drastic change for employees and employers operating in the state.
