Non-Compete Agreements

There are a lot of misconceptions surrounding employment law.  Whether from the perspective of the employer or the employee, the hiring process can have many complications.  Employment contracts are one way to solidify the rights and responsibilities of both sides, but it is important to make sure that the contents of the contract are enforceable provisions.  Non-compete agreements are a type of clause that are in many employment contracts, but require special attention.  Non-compete agreements are contract clauses that prohibit an employee from engaging in particular types of commercial activity after his or her employment has ended.

It is first important to understand that properly drafted non-complete agreements are enforceable in Minnesota.  Minnesota courts typically disfavor the clauses, as public policy supports free citizens being able to switch employment as they please.  Non-compete clauses must support a “legitimate employer interest” in order to be enforceable.  A legitimate employer interest includes such things as protecting confidential information or trade secrets, protecting customer goodwill, and specialized training provided to the employee during employment.  The non-compete agreement must also be reasonable for the duration, scope, and geographical region.  It must be narrowly tailored to protect those legitimate employer interests.  For example, a non-compete agreement that prohibited a scientist from seeking any type of employment for five years in the entire state would likely not be enforceable.  Conversely, the non-compete may be reasonable if it restricted the scientist from working at another lab doing identical work in a fifty mile radius.  Non-compete agreements must also have appropriate consideration to be enforceable.  Consideration is a contractual term, meaning both sides must give and receive something of value.  In the case of a non-compete agreement, the employee must sign the agreement at the outset of his or her employment.  Any non-compete agreement signed after the employment has begun is not enforceable, absent new consideration from the employer.  In other words, if the employer wants the employee to sign a non-compete agreement after the employee has already started working, the employer will need to provide additional salary, more vacation days, or otherwise something of value to the employee.  Failure to do so could mean your non-compete agreement could be found unenforceable.

Call us today to set up an appointment to discuss your non-compete agreement.  We can talk about your rights and responsibilities.