Noncompete Agreement
A contract that restricts a worker from going to work for a competitor or starting a competing business after leaving a job.
A noncompete agreement is a contract where a worker promises not to work for a competing business or start their own competing business for a certain time after leaving a job. These agreements used to be common in Minnesota employment contracts.
However, Minnesota passed a law that bans noncompete agreements for employees. Starting July 1, 2023, any noncompete agreement that restricts an employee is void and unenforceable in Minnesota. This means even if you signed one, your employer cannot hold you to it. The law applies to agreements signed on or after that date.
There are limited exceptions. Noncompete agreements can still be enforced when they are part of the sale of a business (where the seller agrees not to compete with the buyer) or certain business dissolution agreements. But for regular employees, these agreements have no legal force in Minnesota.
Why it matters: If you are leaving a job and your employer threatens to enforce a noncompete, you should know that Minnesota law is on your side. You have the right to work where you choose. An employer cannot stop you from taking a new job with a competitor or starting your own business, regardless of what your employment contract says.
Example: Maria works as a software developer in Minneapolis. Her employment contract includes a clause saying she cannot work for any competing tech company for two years after leaving. When Maria gets a better offer from a rival company, her employer reminds her of the noncompete. Under Minnesota law, that clause is void and unenforceable. Maria is free to take the new job.
In an employment contract, severance agreement, or offer letter from an employer