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New Minnesota Law Bans Non-Compete Agreements

Minnesota state capitol building

On May 16, 2023, the Minnesota legislature passed a law banning non-compete agreements. The law is effective July 1, 2023.

Non-compete agreements are contracts that restrict employees from working for a competitor or starting their own business after they leave their job. An “employee” includes all persons who perform services for the employer (including owners) and independent contractors. These agreements are common in many industries, but they have been controversial for years. Critics argue that they stifle competition and innovation, and they can make it difficult for people to change jobs.

The new Minnesota law is one of the strictest non-compete bans in the country. It prohibits all non-compete agreements, regardless of the employee’s job title, salary, or length of service. There are a few exceptions, such as agreements that are entered into in connection with the sale or dissolution of a business. Non-solicitation agreements and confidentiality agreements are still allowed.

The law is likely to have a major impact on businesses in Minnesota. Many businesses have relied on non-compete agreements to protect their trade secrets and confidential information. Without these agreements, businesses will need to find other ways to protect their intellectual property.

The law is also likely to make it easier for people to change jobs. Employees will no longer have to worry about being bound by a non-compete agreement if they decide to leave their job. This could lead to more job mobility and a more competitive job market.

The new Minnesota law is a significant change in the law. It will have a major impact on businesses and employees in the state. Businesses will need to find new ways to protect their intellectual property, and employees will have more freedom to change jobs.

To learn more about the new law and its potential impacts, watch the recording of the webinar. The webinar includes specific examples and further details about the law.


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Leah Davis, CPA

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