Bill advancing in Minnesota would ban most non-compete agreements between employers and employees or independent contractors. Non-solicitation and confidentiality non-disclosure agreements would still be permissible. If enacted, the sweeping ban would take effect July 1, 2023, but would not be retroactive.

A proposed law banning virtually all covenants not to compete (also known as non-compete agreements) is headed to the Minnesota State Senate and House of Representatives, where it is widely expected to pass. Once it arrives on Governor Tim Walz’s desk, he is almost certain to sign the proposed bill into law. With the enactment of a law banning non-compete agreements, Minnesota would join the ranks of California, Oklahoma, and North Dakota as the fourth state to make non-compete agreements completely void and unenforceable by statute. This development would materially impact Minnesota employers’ ability to protect their trade secrets, confidential business information, and other intellectual property. If the proposed bill becomes law as expected, Minnesota employers would need to take immediate action to address this seismic change and implement new strategies to protect their invaluable intellectual property, customer relationships, and investment in employee training.

Minnesota’s Ban on Non-Compete Agreements Is Expansive in Scope

The proposed Minnesota law is sweeping in scope. If passed in its current form, the bill would prohibit all non-compete agreements with...

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