Enforcing Non Compete Agreements in Minnesota

Enforcing Non-Compete Agreements in Minnesota: What You Need to Know

Non-compete agreements are commonly used by employers to protect their businesses from competition by former employees. These agreements typically restrict the employee from working for competitors or starting a competing business for a certain period of time after leaving their current position. In Minnesota, the enforceability of these agreements is governed by both common law and statutory law.

Under common law, non-compete agreements are viewed as restraints of trade and are generally disfavored. The employer has the burden of proving that the agreement is necessary to protect a legitimate business interest, such as trade secrets, confidential information, or customer relationships. The agreement must also be reasonable in scope, duration, and geographic area. If the court finds that the agreement is overly broad or not necessary to protect the employer’s business interests, it may refuse to enforce it.

Minnesota also has a statute that specifically governs non-compete agreements. The statute requires that the agreement be in writing and signed by the employee. It also specifies that the employer must provide adequate consideration for the agreement, which means that the employee must receive something of value in exchange for agreeing to the restrictions.

The statute further limits the duration of non-compete agreements to a maximum of two years. It also requires that the geographic area be no larger than is necessary to protect the employer’s legitimate business interests. For example, if the employer only does business in one county, the non-compete agreement cannot restrict the employee from working in the entire state.

In order to enforce a non-compete agreement in Minnesota, the employer must file a lawsuit and obtain an injunction from the court. The injunction will prohibit the employee from violating the terms of the agreement during the pendency of the lawsuit. If the employer prevails in the lawsuit, the court may issue a permanent injunction and award damages to the employer.

Employers should note that enforcing non-compete agreements can be difficult and expensive. Courts are generally reluctant to restrict an individual’s ability to work in their chosen profession, and may require a high level of proof before enforcing a non-compete agreement. Employers should also ensure that their agreements are narrowly tailored to protect legitimate business interests and comply with the requirements of Minnesota law.

In conclusion, non-compete agreements can be an effective tool for protecting a business from competition by former employees. However, employers must ensure that their agreements are reasonable in scope, duration, and geographic area, and comply with the requirements of Minnesota law. If you have questions or concerns about enforcing non-compete agreements in Minnesota, it is important to consult with an experienced attorney.