Minnesota Non-Compete Agreements – What You Need to Know

Non-compete agreements have become an increasingly common tool used by employers to protect their business interests. These agreements typically prohibit an employee from working for a competitor or starting a competing business for a certain period of time after leaving their current job.

In Minnesota, non-compete agreements are enforceable if they are reasonable in scope, duration, and geographic area. This means that the employer cannot prevent an employee from working in their chosen field indefinitely, in a very large area or for an extended period of time.

Minnesota law requires that non-compete agreements be supported by a legitimate business interest, such as protecting trade secrets, customer relationships, or other confidential information. Therefore, if an employee has no access to confidential information or trade secrets, a non-compete agreement may not be enforceable.

Non-compete agreements must also be supported by other consideration such as additional pay, promotion or other benefits to the employee, besides their regular salary. If an employee is asked to sign a non-compete after they have already started working, the employer must provide additional consideration for the agreement to be enforceable.

Furthermore, the burden of proof is on the employer to prove that a non-compete agreement is necessary and reasonable. Courts will typically only enforce non-compete agreements if it is necessary for the protection of the employer`s legitimate business interests.

It is also important to note that non-compete agreements do not apply to all employees. In Minnesota, non-compete agreements are prohibited for certain low-wage workers, such as those earning less than $15 per hour. Additionally, physicians are subject to specific guidelines regarding non-compete agreements, which limit the scope and duration of such agreements.

If an employee violates a non-compete agreement, they may be subject to legal action by their former employer. This could potentially lead to an injunction preventing the employee from working for a competitor, as well as damages and attorneys` fees.

In conclusion, non-compete agreements can be a useful tool for employers to protect their business interests, but they must be reasonable in scope, duration, and geographic area. Employers must also provide additional consideration for new non-compete agreements, and must prove that the agreement is necessary for the protection of their business interests. Employees should carefully review non-compete agreements before signing, or seek the guidance of an attorney with experience in employment law.