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Colorado, Illinois, Maine, Maryland, New Hampshire, Oregon, Rhode Island, Virginia, and Washington prohibit non-compete agreements unless the employee earns above a certain salary threshold. Other states, like Iowa and Kentucky, limit the use of non-competes for certain professions such as healthcare workers.
What is the "Blue Pencil Doctrine"? If a Minnesota court finds a non-compete unreasonably broad, the court can "blue pencil" the agreement by reducing the scope, duration, and/or geographic limits of the agreement to the minimum extent necessary to make it reasonable.
The well-known general rule is that a covenant not to compete is only enforceable if its terms are reasonable and necessary to protect the legitimate business interests of the employer.
In certain circumstances, it is possible to find non-compete contract loopholes that may void the contract. For example, if you can prove that you never signed the contract, or if you can prove the contract is against the public interest, you may be able to void the agreement.
There Will Be No Impact on Existing Agreements: Fortunately, the law is not retroactive, meaning existing non-compete agreements are excluded.
Minnesota has enacted one of the strictest state non-compete laws in the US, banning almost all post- termination non-competes between employers and their employees and between employers and certain independent contractors entered into on or after July 1, 2023.
Covenants not to compete are frequently enforced to prevent a former employee from soliciting his or her former customers to buy competing products or services from the new employer.
California law bars covenants not to compete in nearly all circumstances.