Are Non-Compete Agreements Enforceable in Minnesota?
Non-compete agreements are contracts between employers and employees that restrict the employee`s ability to work for competitors for a certain period of time after leaving the job. These agreements are controversial as some argue they limit an employee`s ability to find work and may hinder competition in the market. In Minnesota, the enforceability of non-compete agreements is a hotly debated topic.
Minnesota has a statute that governs the enforceability of non-compete agreements. Under Minnesota law, non-compete agreements are enforceable if they are reasonable in scope, duration, and geographic area. A non-compete agreement must also be supported by consideration, which means that the employer must give something of value to the employee in exchange for their agreement not to compete.
What does «reasonable» mean? The answer is not clear cut, and it varies case by case. However, courts often consider factors such as the employee`s role within the company, the duration of the restriction, and the geographic area covered by the agreement.
For example, a non-compete agreement that prohibits an entry-level employee from working for a competitor within a 100-mile radius for 10 years may be unreasonable. However, a non-compete agreement that prohibits a high-level executive from working for a direct competitor within a 50-mile radius for two years may be reasonable.
Another factor that courts consider when enforcing non-compete agreements is whether the agreement is necessary to protect the employer`s legitimate business interests. Legitimate business interests may include protecting trade secrets, confidential information, customer relationships, and unique skills and training provided by the employer.
It`s worth noting that Minnesota law also includes a provision that prohibits non-compete agreements for certain low-wage employees. Employees who earn less than the greater of $14.25 per hour or the minimum wage are exempt from non-compete agreements.
In summary, non-compete agreements can be enforceable in Minnesota if they are reasonable in scope, duration, and geographic area, and if they are necessary to protect the employer`s legitimate business interests. Employers should be careful when drafting these agreements and ensure that they comply with state law. Employees should also review non-compete agreements carefully before signing them, and if you have any concerns or questions, it`s always advisable to seek legal advice.