§ 1. The Ban: What It Covers
Minn. Stat. § 181.988 (effective July 1, 2023). Non-competes void as of July 1, 2023 for all employees and independent contractors. Does NOT apply retroactively — agreements signed before July 1, 2023 may still be enforceable. Non-solicitation and non-disclosure agreements are still permitted.
Recent legislative developments: Full ban effective July 1, 2023. Applies to agreements entered into after that date.
§ 2. Exceptions to the Ban
While Minnesota broadly prohibits non-compete agreements, the following exceptions remain:
- Sale-of-business exception
- Non-solicitation agreements still allowed
§ 3. Choice-of-Law Clauses: The Hidden Risk
Even though Minnesotabans non-competes, your agreement may contain a choice-of-law clause selecting another state's law — for example, "This agreement shall be governed by the laws of Delaware." If your employer is headquartered in a state that enforces non-competes, they may argue that state's law applies to your agreement. Whether such a clause is enforceable against a Minnesota resident depends on several factors, including where you performed work, where the employer is located, and recent legislation addressing this exact issue.
§ 4. Non-Solicitation & NDAs: Still Enforceable
Minnesota's ban on non-competes does not extend to non-solicitation agreements or non-disclosure agreements (NDAs). Employers can still prohibit you from soliciting their clients, customers, or employees after you leave. These restrictions can be broad enough to function as de facto non-competes, depending on how they are drafted. If your agreement includes non-solicitation or confidentiality provisions, those may remain fully enforceable even though the non-compete clause itself is void.
Practitioner Notes
Does NOT apply retroactively to agreements signed before July 1, 2023. Non-solicitation and confidentiality agreements remain enforceable.