The 2023 Minnesota legislative session, which ended May 22, was chock-full of critical employment law developments that will have immediate and ongoing impacts for employers in Minnesota on a variety of fronts, including paid leave, accommodations, noncompetition agreements, drug testing and other worker safety requirements, to name a few. Below is a summary of the most critical developments that apply to most Minnesota employers and what they mean for employer practices and operations.
Noncompete Ban
A bill banning noncompete provisions in employment agreements passed in the Minnesota Legislature and Gov. Walz is expected to sign the bill into law. The bill prospectively prohibits all noncompete agreements with employees or independent contractors regardless of their position or level of compensation. It does not, however, prohibit noncompetition agreements that are agreed to: (1) during the sale of a business where the agreement prohibits the seller from carrying on a similar business within a reasonable geographic area for a reasonable period of time; or (2) in anticipation of the dissolution of a business in which the dissolving partnership or entity agrees that the partners, members or shareholders will not carry on a similar business in a reasonable geographical area for a reasonable period of time. Nonsolicitation and confidentiality agreements with employees and independent contractors would still be permissible.
The new law would take effect July 1, 2023, and is...
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