North Dakota Non-compete Agreement Template

The North Dakota non-compete agreement protects the employer’s business, on the one hand, and maintains employee’s sovereignty and future development, on the other hand.

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For Employers

Non-compete covenants serve to restrict the unauthorized usage of the employer’s business-sensitive information by unconscionable personnel and block ethically challenged business decisions. Most documents pre-arrange terms that prohibit or limit the hired individual or business partner from running a similar business in the designated territories. It allows the agreement’s mover to preserve the uniqueness of their trade, avoid confidential data exposure to third parties, and maintain healthy competition.

For Employees

The recipient must not reveal confidential data to other competing entities after submitting their consent. The employee also agrees to reasonable limitations if they decide to leave the company and continue development in the same field. Usually, a non-compete agreement example contains paragraphs that specify whether the employee (or the partner) may or may not provide the same service in the same territories. Also, the form defines the period during which these restrictions are valid.

However, some states predetermine that non-compete covenants are not enforceable within the state boundaries. In this case, it is illegal to impose the stipulations and bind the employee with certain liabilities. Therefore, it is highly recommended to read the details accurately and append signatures only if all terms are clear and fair.

North Dakota protects both parties and establishes reasonable liabilities and powers. You are encouraged to read about the state’s standards in the last section of this review.

Non-Compete Covenant Components

Under the state standards, a North Dakota non-compete agreement should contain the following specifications:

  • Purpose

This part includes general information about engaging limitations that the employee (or the partner) is exposed to.

  • Disclosure

The section reveals a list of “shall not” directions. Usually, the parties choose some or all of the promoted restrictions.

  • Geographic Area

This section is of extreme importance. It prevents both monopolizing the business field and using malevolent information. Reasonable selection of territories allows both parties to run business practices without constraining each other’s rights and opportunities to profit.

  • Period of Agreement

It is nice to know that restrictions won’t be applied to life. Still, study the pros and cons of the contract not to jeopardize your future development and profit opportunities.

  • Jurisdiction

Every non-compete document contains the jurisdiction section to specify the state and laws supervising the procedure.

  • Confidential Information

This reveals the type of data the employee cannot divulge.

  • Permitted Disclosure

This, on the contrary, determines the data the employee can expose and use when necessary.

  • Curing Violation

Curing violation covers the detail on how the agreement breaches will be mended.

  • Certification

Both parties provide their identification and signatures to prove their consent with the afore-mentioned in writing.

All adjustments must be provided in writing and signed by the employer and the employee.

North Dakota NCA Laws and Restrictions

North Dacota statutes do not provide compulsory non-compete practices, making it likely illegal to impose such a contract on a partner or a hired individual. Still, there are a couple of cases that require non-compete covenants.

The non-competes are regulated by § 9-08-06 (In Restraint of Business Void—Exceptions) of the North Dakota Century Code and claim the following:

  • Selling the goodwill of a business is likely registered with a non-compete covenant attachment.
  • Dissolution of a partnership and a legal promise not to carry the identical business practices can legally engage non-competes.

Both cases are limited by a reasonable area and period conditions. It means that business partners can agree not to interfere within the same business practices in the same territories for a certain period.

Some companies can still legally initiate non-compete agreements to protect sensitive and secret data. As North Dakota laws do not promote or prohibit using such contracts, the employees should put a special focus on the terms and conditions not to get trapped or even prosecuted for breaching the contracts. We encourage you to take your time to study the agreement or turn for legal assistance if necessary.

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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.