North Dakota stands alongside California, Minnesota, and Oklahoma as one of the few states with a near-total prohibition on non-compete agreements. This protection has been in place for well over a century and reflects a deep commitment to worker mobility and economic freedom.
North Dakota's Non-Compete Ban
North Dakota Century Code § 9-08-06 provides that every contract by which anyone is restrained from exercising a lawful profession, trade, or business of any kind is void. This language is broad and courts have interpreted it broadly — non-compete agreements are generally void and unenforceable in North Dakota.
✅ If you live and work in North Dakota, your non-compete agreement is almost certainly void and unenforceable. You are free to work for competitors, start a competing business, and use your professional skills wherever you choose. North Dakota's ban is one of the longest-standing in the country.
The Very Limited Exceptions
North Dakota's ban has very narrow statutory exceptions that apply only to specific business transaction contexts — not to typical employees:
- Sale of a business: A seller of a business can agree not to compete with the buyer as part of the sale. The geographic area is limited to where the business was actually conducted.
- Dissolution of a partnership: Partners can agree not to compete with each other upon dissolution of their partnership.
- Dissolution of a limited liability company: Members can agree not to compete upon dissolution of an LLC.
These exceptions apply to business owners in transaction contexts — not to employees. If you are a regular employee, these exceptions almost certainly do not apply to you.
⚠️ Some employers include choice-of-law clauses in non-compete agreements stating that another state's law governs the contract. North Dakota courts have generally held that North Dakota's public policy against non-competes overrides these clauses when the employee lives and works in North Dakota. An out-of-state employer cannot circumvent North Dakota's ban simply by putting another state's law in the contract.
What Can Employers Still Do in North Dakota?
While non-competes are void, North Dakota employers can still:
- Protect genuine trade secrets under North Dakota's trade secret law
- Require confidentiality agreements protecting truly proprietary information
- Pursue claims against employees who steal or misappropriate trade secrets
Non-Solicitation Agreements in North Dakota
The broad statutory ban covers agreements that restrain the practice of a lawful profession, trade, or business. Whether narrowly drafted non-solicitation agreements — which prevent you from soliciting specific customers rather than broadly prohibiting competition — are enforceable in North Dakota requires careful legal analysis. Consult an employment attorney if you have a non-solicitation agreement in North Dakota.