Minnesota Non-compete Agreement Template

When dealing with new employees, business partners, or even consultants, the company needs to take precautions regarding its confidential data, intellectual property, and trade secrets. All these are considered confidential, and every company seeks better ways to protect them. The Minnesota Non-Compete Agreement is one way to do so.

Business entities depend significantly on sensitive information to obtain commercial value. They can only protect it by maintaining confidence in their professional relationships. With a non-compete agreement template, the company can set forth particular restrictions upon its employees and partners to prevent unlawful competition. Under a non-compete covenant, a company ensures that its former vital employees do not work for a competing company within a certain period after the employment expiration or termination.

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The agreement itself represents a legally enforceable written promise that the subject employee (business partner, contractor, or agent) will not, under any circumstances, disclose the received confidential data concerning:

  • The company’s products and manufacturing techniques
  • Management and marketing methods
  • Developments and inventions
  • Information on the company’s clientele, partners, and contractors
  • Other relevant business practices carrying a commercial value

NCAs often come with stipulations that prohibit the recipient from conducting business or working with any competing company within a distinguished geographic area for a particular period after the employment is over. Once both parties sign the agreement, it comes into force. Violation of the non-compete covenant may have serious legal consequences, including fees, detainment, reparations, and even jail time.

The following section will tell you some more about the local legislature, norms, and restrictions applied in Minnesota regarding non-compete agreements in 2021.

Minnesota NCA Laws and Restrictions

In the state of Minnesota, no statutes regulate non-compete agreements and relations. Generally speaking, the local authorities tend to disfavor such arrangements regardless of the reason behind them. Thus, the employers enforcing such binding documents have to make an effort to prove their NCA is lawful, sensible, and complies with all the local norms and restrictions. The conditions and terms indicated in the NCA should be fair to both parties.

Although the state of Minnesota has no specific legislature regarding non-compete covenants, the local courts have created a system of precedents to define whether an agreement is lawful. Mostly, the courts tend to support and ensure the employee’s rights so that no employer could impose unfair restrictions by an NCA and deprive the subject employee of the right to work and earn a living. That is why all state NCA documents have to undergo specific scrutiny.

Popular Local NCA Forms

Non-compete documents are acknowledged and enforced to a varying degree by the vast majority of US states, which makes them pretty widespread among various organizations. Discover more about the most common states requested by our website users with regards to non-compete forms.

Guidelines to Creating a Valid NCA in 2021

As mentioned above, the Minnesota courts decide if the particular non-compete agreement is lawful and enforceable. Hereunder, we will review the parameters that courts take into account when making the decision:

  1. The first thing a court would determine is an appropriate consideration. In plain words, consideration means that the recipient will get something proportionate in return for agreeing to accept the NCA limitations. Please remember that the employer must make such a proposal before hiring a new staff member (creating a new business partner) to make the covenant valid.
  2. The second thing to pay attention to is the fairness and necessity of the imposed limitations. The Minnesota courts would review the facts and, based on them, decide whether there is a real necessity to create a non-compete clause to protect the secrets, interests, and goodwill of a given company.
  3. Finally, the third issue the Minnesota courts would review is limitations scope. When creating a non-compete agreement, you should keep in mind that it cannot be any more restrictive than required to protect the company’s trade secrets and intellectual property. This rule implies that all limitations regarding the scope of work (depending on the industry), validity period, and geographic area have to be reasonable.

Usually, the courts decide on the NCA’s validity based on the temporary restraining order (TRO). Thus, the court determines if the particular employer is entitled to prevent the subject worker from engaging in competitive activities and prescribe legal expenses for the agreement violation.

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Published: Feb 11, 2021
Jennifer M. Settles
Jennifer M. Settles
Author & Attorney
With over 25 years of experience as a business and transactional attorney, Jennifer has mastered the craft of closing highly successful deals for her clients. Through her wide-ranging expertise in commercial contracts, real estate transactions, M&A and corporate law, Jennifer secures results that are second-to-none.