Minnesota made a decisive move to protect workers in 2023. The state banned non-compete agreements for most employees — joining California, North Dakota, and Oklahoma as states with near-total prohibitions on these restrictive covenants.
Minnesota's Non-Compete Ban — Effective July 1, 2023
Minnesota Statute § 181.988, effective July 1, 2023, voids non-compete agreements for employees and independent contractors. Key provisions:
- Non-compete agreements entered into on or after July 1, 2023 are void and unenforceable
- The ban applies to both employees and independent contractors
- It covers agreements that restrict the worker from working for a competing employer or operating a competing business after the employment relationship ends
✅ If you signed your non-compete on or after July 1, 2023, it is void under Minnesota law. Your employer cannot enforce it against you regardless of what the agreement says. This is true even if the agreement contains a clause stating another state's law applies — Minnesota courts apply Minnesota law to Minnesota workers.
Limited Exceptions to the Ban
Minnesota's ban has very narrow exceptions:
- Sale of a business — A seller of a business can agree not to compete with the buyer as part of the sale transaction
- Dissolution of a partnership or LLC — Partners or members can agree not to compete upon dissolution
These exceptions apply to business owners in transaction contexts — not to typical employees.
What About Non-Competes Signed Before July 1, 2023?
The ban applies prospectively — it voids agreements entered into on or after July 1, 2023. Non-competes signed before that date are governed by the older Minnesota common law reasonableness standard. Under that standard, courts evaluated whether restrictions were reasonable in duration, geographic scope, and scope of activity.
⚠️ If your non-compete was signed before July 1, 2023, it may still be enforceable under pre-ban Minnesota law. However, Minnesota courts even under the old standard were skeptical of overbroad restrictions. Consult an employment attorney to evaluate your specific pre-2023 agreement.
Non-Solicitation Agreements in Minnesota
Minnesota's ban covers agreements that prevent you from working for a competitor — but non-solicitation agreements that prevent you from soliciting specific clients or employees may still be enforceable if they are narrowly tailored and protect legitimate business interests. The line between a non-compete and a non-solicitation can be fact-specific and requires legal analysis.
What Can Your Employer Still Do?
While non-competes are banned, Minnesota employers can still:
- Protect trade secrets under Minnesota's Trade Secrets Act
- Require confidentiality agreements protecting genuinely proprietary information
- Use narrowly tailored non-solicitation agreements in some circumstances