As a Minneapolis business attorney, I get two types of questions related to Minnesota noncompete agreements:
- Is this contract not to compete enforceable?
- Would you draft a noncompete agreement for me?
In the sections below, I answer these questions by explaining an overview of Minnesota law related to noncompete agreements with employees. Below that is a 2011 update with an overview of Minnesota law related to noncompete agreements with independent contractors.
Finally, the 2012 update presents do-not-compete contracts with professionals like medical doctors, accountants, dentists, attorneys, and veterinarians.
Noncompete agreements involving the sale of a business are generally enforceable, so those are excluded from the legal guidelines below.
1. Enforceability of Non-Compete Agreements
Whether the contract is called a “noncompete” or “do not compete” agreement, the intent is the same: the employer seeks to bind the employee from leaving employment and competing with the employer at another company or individually. Whether they are enforceable depends on a number of factors to be analyzed by an attorney. These factors include:
- Independent Consideration - Was the employee paid independent consideration (compensation) for signing the noncompete agreement? In most circumstances this consideration is financial compensation, but training and promotions can sometimes be sufficient.
- Geographic Limitation - Is the geographic limitation in the noncompete agreement reasonable or too broad? This depends on the type of business. Local businesses are narrow, and international businesses are broad. The test is whether the employer has a legitimate business interest deserving protection.
- Enforcement Period - How long is the noncompete agreement in force after the employment relationship is terminated? Two years or less is generally okay. Longer is suspect.
Before you ignore a noncompete agreement, you should consult with an attorney to analyze the contract. An attorney can give you a legal opinion regarding whether the noncompete is enforceable. The consequences of breeching a noncompete agreement may include a temporary restraining order preventing you from working in violation of the noncompete along with a lawsuit for monetary damages.
2. Drafting Non-Compete Agreements
The laws involving noncompete agreements varies across the United States. A noncompete agreement that is enforceable in one state may not be enforceable in another. For this reason, understanding Minnesota law is important. Also, noncompete contract forms purchased on the internet may be inadequate for parties in Minnesota.
When I draft a noncompete agreement, the process involves carefully applying relevant Minnesota law to ensure the contract remains enforceable. Properly written noncompete agreements are routinely enforced by courts in Minnesota. However, mistakes can void the agreement. For this reason, you should consult with an attorney if you need a noncompete agreement drafted.
2009 Update: Employee Non-Compete Agreements
Three 2008 Minnesota court cases may make noncompete agreements easier to impose on employees and enforce on ex-employees who signed noncompetes. Three Minnesota Court of Appeals cases upheld noncompete provisions under a variety of circumstances:
- Tenant Construction, Inc. v. Mason, 2008 WL 314515 (Minn. Ct. App., Feb 5, 2008) (unpublished).
- Sealock v. Petersen, 2008 WL 314146 (Minn. Ct. App., Feb 5, 2008) (unpublished).
- Witzke v. Mesabi Rehabilitation Services, Inc., 2008 WL 314535 (Minn. Ct. App., Feb 5, 2008) (unpublished).
Witzke is especially interesting because the court held that “continued employment” for a long duration after signing the noncompete will qualify as “consideration.” Previously, the general rule was that a noncompete must be accompanied by “independent consideration” (normally some sort of financial compensation) to be enforceable on a current employee.
Other Minnesota law firms have also written good articles on Minnesota noncompete law:
- Will Your Noncompete Clauses Stand Up in Court? by Marshall H. Tanick
- Litigating Covenants Not to Compete, by William Christopher Penwell
In the end, whether a noncompete agreement is enforceable is often unclear because every situation is different. There is no clear line. For this reason, even most attorneys who are not experienced with noncompete agreements will defer to the analysis of an experienced noncompete lawyer. Thus, it goes without saying that, if you are not an attorney, you should consult with an experienced noncompete attorney to determine whether your noncompete contract is enforceable.
2011 Update: Independent Contractor Non-Compete Contracts
There was recently an important development in Minnesota law regarding noncompete agreements with independent contractors.
The Minnesota Court of Appeals held that the the doctrine of independent consideration (which generally requires independent payment to an employee for a noncompete agreement to be valid) did not apply to independent contractors.
The case is Schmidt Towing, Inc. vs. Chris Frovik d/b/a FTR Towing and Recovery, 27-CV-09-6303 (Minn. Ct. App. Nov. 9, 2010).
The Minnesota Court of Appeals did not say that noncompete agreements with independent contractors are always invalid. Rather, the Court of Appeals directed the district court to examine the enforceability of the noncompete agreement using “the legal principles that generally govern noncompete agreements.”
2012 Update: Attorney, Doctor, Dentist, Accountant & Veterinarian
Recently, I have represented a number of professionals who were bound to noncompete agreements. It is important to note that Minnesota law generally enforces noncompete agreements as part of the sale of a business.
Minnesota Attorney Noncompete Agreement
The Minnesota Rules of Professional Responsibility prohibit the enforcement of a noncompete against another attorney. The basis for this rule is that clients should have a right to pick their attorney, and a noncompete agreement among attorneys would violate the client’s right to choose a lawyer. Thus, Minnesota law does not permit noncompete agreements among attorneys.
Minnesota Doctor Noncompete Agreement
No Minnesota law prohibits a noncompete agreement with an employee doctor. However, the American Medical Association (AMA) has an opinion “discouraging” noncompete agreements.
Minnesota Dentist Noncompete Agreement
The American Dental Association’s professional code provides for “freedom of choice” for patients to select their dentist “without any type of coercion.” However, Minnesota law generally does not restrict noncompete agreements with an employee dentist.
Minnesota Accountant Noncompete Agreement
Minnesota law generally does not restrict noncompete agreements with an employee accountant or certified public accountant (CPA).
Minnesota Veterinarian Noncompete Agreement
No Minnesota law prohibits a noncompete agreement with an employee veterinarian. However, the American Medical Association has an opinion “discouraging” noncompete agreements.
About the Author: Attorney Aaron Hall routinely represents employees and employers with noncompete agreement disputes and drafting noncompete agreements. He is available to analyze noncompete agreements or represent parties seeking to understand their legal rights and options. Aaron is licensed to practice law in Minnesota state and federal courts. His work is largely in the Twin Cities, Minneapolis and St. Paul, MN.
Previous and Next Posts:
Like this? Click here →
{ 108 comments… read them below or add one }
Next Comments →
If I know someone who signed an agreement and was laid off and the agreement was signed for 3 years and for the whole state what do you think the chances are that this will be upheld in a court of law?
Jennifer:
There are a number of factors that need to be considered. For example, if the business served a five mile radius of its location (such as small health club), a noncompete covering the entire state of Minnesota would exceed what is necessary to protect the interests of the business. However, the facts you mentioned would not, on their face, make the noncompete unenforceable.
Aaron
We contract with healthcare entities and provide the therapy services to their patients. The therapist are our employees and have non-compete with us -theri employer. We also have a non-compete clause in our contract with the healthcare entity in essence eliminating them from employing our therapsits should the contract be terminated. The client is considering cancelling our contract and feel that MN law would allow them to break the non-compete and hire our employees? Will MN law uphold the client to client non-compete?
Debbie, it would be helpful to fully understand all of the circumstances surrounding these agreements. In general, none of the facts you presented would permit someone to escape a noncompete agreement. Feel free to give me a call.
I worked for a Freight Company for 4 years, and quit to help/work at a family business. After 6 months; the family business closed down, so I had to seek employment and I got hired to work for another Freight Company. I worked here for about a year, and now I just found out that I might be getting sued for violating my non-compete agreement. My old employer’s lawyers have sent papers, they’re asking me to quit my job & pay 50K as per the non-compete agreement & legal fees.
Can they really enforce this on me? I don’t believe I’m doing anything wrong, at my old job I was doing customer service/dispatch support work, I’m currently a receptionist & doing clerical work at my new job. I’m just trying to make an honest living & pay my bills. I’m 7months pregnant and I can’t afford to quit my job. Can my old employer really sue me, take me to court?
I was laid off in October by my former company. When I signed the non-compete (in 2005), they were located in Minnesota, now they are in Wisconsin. I reside in Missouri (both then and now). From the beginning of my employment, I was given a sales territory of the Western US and Canada. At no time did I ever work for them in Missouri, Minnesota or Wisconsin. Is the non-compete apply to the laws of which state? What if I move to lets say California or Texas. Can they enforce this on me wherever I live and/or work?
I started at a company when I was just turning 16 years old, I am now currently 20 and wish to leave this place to go to another business and do the same thing. I have no intention of taking customers or trade secrets over, just that I need more pay and they are willing to pay a lot more for my abilities. With my age being 16 when I signed the non-compete contract, will it still hold up?
Is there any documentation on subcontractors versus employees and non compete agreements? where can i find such information?
Does a former employer have an obligation to serve a cease and disist order as pertains to a no compete agreement within a reasonable amount of time? If so, how long does the former employer have to file for it or for a TRO.
There are 12 of us in sells department. We each received the same updated contract to sign. Our compensation in the contract is less. Everyones is 17 pages of jargon EXCEPT mine. They through in a last page with a non-compete clause. No one else has this clause…only mine!!! My questions are 2 fold …1) Is it enforceable if I am the only one that has the additional page and 2) Why?
Thanks
John
Dean:
Yes. Employers must take legal action to enforce a noncompete agreement within a certain amount of time to preserve their rights. The amount of time allowed would be based on a statute of limitations or other legal deadlines. To learn the deadlines in your situation, you should obtain advice from an attorney who understands the facts and circumstances in your case.
Aaron
Cathy:
I am not sure where you could find information regarding the differences between a noncompete agreement with an employee vs. a noncompete agreement with a subcontractor (or independent contractor). You could hire an attorney to research this for you or possible a reference librarian at a law library could help you find this information.
Aaron
Jordan:
The fact that you were 16 years old when you signed the noncompete agreement will probably not get you out of the agreement. However, the noncompete agreement might be unenforceable for other reasons (as noted in the article above).
Aaron
I was recently laid off from a company in which I had signed a non-compete with. I’m wondering if a non compete can be considered an implied contract that the company would have work for me, and since laying me off for no fault of my own that would mean the company is breaking their end of the contract? Thus meaning I’m still bound by the non-compete but they are liable for any lost income as a result of my not working for them.
If more detailed information is needed to answer this question, you are welcome to e-mail me.
Thank you
Jon:
In general, a company has no obligation to keep an employee employed after the employee signs a non-compete agreement unless the terms of the agreement state otherwise. It may be worth paying an attorney to analyze the agreement and determine whether the non-compete agreement converted you from an “at will” employee to a contract employee, but most attorneys who draft non-compete agreements are very careful to prevent that from happening.
Aaron
I am a contracted medical sales rep and live in Minnesota. I recently had signed an updated non compete contract, but didnt get a signed copy back from the owner. I had asked my manager after a couple of months where my signed contract was, and he said the owner hadnt got around to it. In the meantime the company went with direct reps instead of contracted sales reps. Since I never received a signed copy of the contract, am i under contract?? More importantly, is my old contract null and void?
Thanks
Jeff
Jeff:
You are bound by any contract you enter, even if you did not get a copy. A contract is not null or void simply because you did not receive a copy.
Aaron
Aaron,
If the copy was never signed by the manager or the owner, how am i legally under contract??
Thanks
Jeff
Jeff:
If the business never agreed to the terms, you are not bound to the “contract” because it was essentially just an offer from you that the business never accepted (so no contract was formed). One question will be whether the business signed the contract after receiving it from you, even though they never gave you a copy. My point is that it doesn’t matter if you have a copy if both parties agreed to the contract.
Keep in mind that a contract is an agreement between parties, which can be oral (not written). Technically, it doesn’t matter if a contract is written and signed on a piece of paper. Of course, it can be difficult to prove there was an oral agreement if there is no written evidence, such as a signed document labeled “contract,” a letter confirming the agreement, or an email.
Disclaimer: This website is for the general discussion of legal concepts. For an analysis of your situation, you should meet with an attorney and discuss all the facts and circumstances. There are a number of facts and circumstances that could produce a different result (and legal advice) from the general principles discussed here. Readers should not rely on the information discussed here—consult an attorney for your specific situation.
Aaron
If a veterinarian is providing specific services as an EMERGENCY veterinarian for a business that strictly provides emergency veterinary care, can the employer prevent the veterinarian, via a non-compete contract, from practicing regular daytime veterinary services within the defined geographic region? Doesnt’ seem fair if there is no risk of impacting the emergency veterinary business. Thank you.
Eric:
You are correct, that doesn’t seem fair because there is an argument that you would not be competing, and the employer has no interest being protected with this noncompete. This is a grey area and will partially depend on the language of the noncompete agreement and circumstances involved with your job. I suggest having an attorney analyze your situation. You may contact my firm if you would like.
Aaron
I am a manufactures representative. I signed a noncompete for 1 yr this past February. This July they started canceling orders for my customers because they could not deliver product in a timely fashion or not at all. They have had financial difficulties and can’t pay me the past commissions due me and my company. I have resigned the company due to breach of contract(non payment of commissions). I have hired a new manufacture. The new one competes with the previous. Does the previous manufacture have a case against me? Thanks, John
John:
The previous manufacturer may have a valid claim against you. The previous manufacturer may also have a valid claim against the new manufacturer for tortious interference with contract. Whether the previous manufacturer has a valid claim depends on the language of your noncompete agreement and it may depend on the amount of money the manufacturer never paid you.
Obviously, you have a claim against your previous manufacturer for breach your agreement with them to be paid for the services you performed. I suggest you contact an attorney in your state (such as me) to analyze your circumstances and the language of the noncompete agreement to ascertain your legal options.
Aaron
Ob
I signed a non-compete with a company for any customers that I’d done business with for any products and services. At the end of a year, the company discontinued my current arrangement and offered me a different compensation plan that I didn’t accept. I was told that my employment was over.
Am I bound by that non-compete? Can I be barred from selling anything (not just goods and services that compete with my previous employer?)
Is a Minnesota no-compete enforceable in, say, Hudson, WI?
Ken:
A Minnesota Court would enforce a noncompete related to a relationship/transaction in Minnesota even if one party was now in another state. Whether a Minnesota noncompete agreement is enforceable in another jurisdiction (such as the state of Wisconsin) depends on whether that jurisdiction (state) will enforce it. Most states will enforce a Minnesota noncompete. However, I’m not sure whether a Minnesota noncompete would be enforced in a state like California where employment noncompete agreements are prohibited by law.
Aaron
Frank:
The general rule is that you are bound by a noncompete you enter. However, under the facts you presented in your question, there may be exceptions. I suggest that you consult with an attorney in your state who can analyze your noncompete agreement and the particular facts. I advice clients on noncompete agreements where the agreement has at least some relationship with Minnesota, such as one party being located in Minnesota or the noncompete agreement covering work in Minnesota.
Aaron
I am a veterinarian. I have not signed a non compete contract. I have considered opening up my own clinic in the area. Are there any implied non compete laws protecting my current employer?
Dave:
As an employee, you have a duty of loyalty to your current employer. Thus, while you are employed, you cannot compete or undermine your employer. You also have a duty not to take from the employer any trade secrets, which may include internal policies, internal procedures, and client lists. However, there generally is no problem with leaving an employer and opening up a competing business the next day.
Aaron
I am wondering if a non-compete agreement I signed in 2007 for four years can be let go by the court. Back in 2007 I owned a dance studio, I was going through personal issues where I needed to take some time away from running the dance studio. I caught wind of my competitor in town was looking for a new place to hold her dance studio, so I offered her my place. She expected and on the day she went to take over the remain four years of my lease she had a person with her that took care of all her legal issues for her studio. I was completely taken by surprise and advantage of over the non-compete being presented on the day we were during the lease over to her and I had no clue she was going to have one. If needing to focus on personal issues I accepted and agreed to the non-compete in 2007.
Then is summer I decided I would try and reopen a dance studio, I had students seek me out saying they we either not dancing at all since I left or had quit after dancing with the studio who I signed the non-compete with. I figured the agreement was up and I had nothing to worry about after relocating so I could still at least teach dance for 3 years over 60 miles away from where I established my business. The person I signed the non-compete with got my studio, my mirrors I paid over 5 grand for because my landlord would not agree to have them removed and she got my client list and I asked of nothing in return. So when she found out I was reopening had her legal person pretty much harass me via phone and through text messages of not to continue with opening a studio back up where I had orginally had one. I talked to an attorney and they told me to send a letter explaining why I was reopening a business and that she had received mine pretty much for free and that four years is a long time and to wave the last year. She would not agree and we are now schedule to go to court at the end of the month.
I still went ahead and opened a studio, I received a small amount of students which was fine by me to start small. All the students I have either have not danced since I left or danced with her in a year because they do not like her dance studio.
I guess what I am asking is there a chance I can win and not have to shut down and waiting another year to teach? I have students who refuse to go to her for dance or two drive 30 miles to receive dance lessons at the next closest studio. The lady who I signed the non-compete with was able to run a successful business while I ran mine y3 years ago and I don’t understand why she can’t just give up the last year, because I will be back if she is to win next year anyways to rebuild my studio. I do currently live over 60 miles from the city I owned a studio due to personal reasons and because of the non-compete so I cold still do something I love and maintain a flexible job while having children. So what do you think? Thank you!
Jan:
The purpose of this blog is to provide general education regarding Minnesota law, not provide advice for highly specific, detailed situations. There is too much in your comment to address on a blog. I suggest you consult with an attorney, which will provide a comprehensive analysis and explanation for the many issues you raised.
Aaron
My husband has worked for a rural Minnesota funeral home that is based out of South Dakota for almost 5 yrs. The day he was hired he signed an “Employment Agreement” which had a starting salary amount stated on it, a two suits per year clothing allowance, a 2 year non-compete within 50 miles agrement & medical insurance (does not say family is included on the agreement but they have covered since day one).
A month & a half ago he was told that he could no long afford medical insurance for the family only him & It would go into effect Jan. 1, 2010. Then two weeks ago he was told he would be let go at years end due to budget cuts. People in our community & surrounding communities threw a fit. A week later my husband was asked to stay on because the boss said he made a mistake. That being said his boss is still cutting the family from the medical insurance keeping him on the insurance & cutting his salary which would be under the oringinal amount of what the “Employment Agreement” stated to be his starting out salary 5 yrs ago. My husband has NOT excepted these new terms as of yet & no new contract has been presented to him either.
My questions…
1.) If on the agreement it said just medical insurance & he has been paying all along for our family is it assumed that the contract ment family as well? Does this mean he still has to provide family insurance?
2.) Is his boss in breach of contract for the salary or the insurance?
3.) If so, does the non-compete part of the contract still stand or is it voided as well?
Liz:
Great questions. Unfortunately, the answers to your questions depend on a number of factors. For example, the answers would depend on the language of the Employment Agreement analyzed under Minnesota law. I recommend that you contact our firm or another attorney to analyze the Employment Agreement and your circumstances to give you accurate legal advice for your situation.
Aaron
I have worked for a company for exactly one year now. Recently, they asked me to sign a non-compete agreement, and the term length is 2-years past my last date of employment. They asked me to sign this, and said they’d pay me “two or three hundred dollars” to sign it (I don’t make much, only 25k per year). I’m reluctant to sign any non-compete, but knowing the owner of the company, I believe I have no other choice that to sign the contract – or they’d find a way to displace me. What are my range of options? Secondly, I don’t think “$200 or $300″ is fair compensation for having someone sign a contract of this nature. I’m inclined to say I want “X” amount, or “X” amount for each successive year of the agreement. Again though, I can’t afford to be out of work anytime soon.
Is there a way to address their demands without getting fired, and / or water down the agreement so it wouldn’t be enforceable? I appreciate your thoughts on this.
Jim:
Unfortunately, your options are (1) sign the noncompete agreement as offered, (2) negotiate an amount that you feel is fair and sign the noncompete agreement, or (3) don’t sign the noncompete agreement and wait to see if the employer fires you. In Minnesota, employers can fire you for not signing a noncompete agreement. However, maybe your employer won’t fire you.
Keep in mind that even if you sign the noncompete agreement, you can be terminated from employment and you are still bound to the noncompete agreement.
I realize this is a frustrating situation for you. States like California have prohibited noncompete agreements with employees because of the power it gives employers over employees.
Aaron
I’ve worked for this company 14 yrs. We were sold 1 yr ago. If i signed a non-compete with the old company will it roll to the new company? Thank you
Kent:
Whether your noncompete agreement is still enforceable after your company was sold depends on (1) whether the noncompete agreement with you was assigned/sold and (2) whether your noncompete agreement permitted assignments. In most company sale situations, the contracts are sold/assigned. In most noncompete agreements, the employer drafts the language, so the employer includes a right to assign the noncompete if the company is ever sold.
I realize this doesn’t answer the question for your situation, but hopefully this explanation is helpful in understanding the issues involved.
Aaron
Hey Aaron-
Question for you. My fiance signed a non-compete agreement with her company four years ago. They are moving their entire organization from Minneapolis to Chicago and offered her a position, but in Chicago. She declined it and they ended up laying her off. She wants to go work for a competitor here in Minneapolis, but is afraid that her company will come after her for the non-compete? Isn’t this null and void since they laid her off? They stated that they offered her a position, but in Chicago which is 6 hours away. Doesn’t seem fair to me.
Let me know your thoughts
Aaron Clark:
I agree that it doesn’t seem fair. However, the noncompete agreement is not null and void merely because the employee was terminated.
Aaron Hall
Aaron,
I signed a noncompete back in 2009 for an insurance agent with the understanding that I would be running his office and would be getting paid between $100,000 to $150,000 by my third year along with putting money into a Health Saving account. None of this has happen, I took a $15,000 pay cut for the job. I was informed at the end of 2009 that the only way I was going to make more money was to make sales. He now takes $0.75 out of every dollar I bring in. Also indicated at the begining of this year that I would be getting paid a percentage of the crop hail insurance we sold, I just received my check all it had in it was the commisions for my own customers. What he says and what he does are the complete oppisite. I was also in various discussion with the owner on purchasing the agency. Now it appears that he is selling to someone else. I would like to go out on my own, at least if I starve it will be my own fault. I can not afford to work for him any more. His non-compete is so stupid it claims that I cannot even sell different types of insurance that we don’t even sell. He makes over $1,500,000 each year and is only paying me $50,000 and has refused to redo any of the pay or commisions and now claims that he doesn’t remember any of the compensation discussion. My spouse as there when we had that discussions so I don’t know if that helps or not. Hell or high water I have not other choice but to leave, my expenses are more than what I make so my credit score is taking it in the shorts. Any help would be appreciated. If needed I am willing to have your firm look at my non-compete.
Thanks Tod
Tod:
It appears that you entered into the noncompete agreement with the understanding that, in exchange for agreeing not to compete, you would receive something, which you never received. Based on this, it would appear that your employer breached your agreement. The challenge is proving it, which could be done in part by the testimony of your wife (but her testimony would be seen as biased, so its value might be limited).
Ultimately, this is one of those complex situations that require an attorney’s analysis to identify other important facts, determine your options, and estimate your odds at prevailing.
Aaron
I was asked to sign a non compete agreement with a former employer.
When asked to sign the agreement I was told that if I did not I would be fired.
Jobs are hard enough to find these days so I signed.
I have been in the printing business since I was 22 years old and am now 51.
The company I was working for previously was making a specialty product that is a niche to them.I taught the owners and all who work there now all they no.She is saying that I gained all my knowledge after she purchased the business.she has only owned the business for three years.Is it legal to tell someone there fired if they dont sign.
Jim:
Yes, it is legal for employers to tell employees that they will be fired if they don’t sign a noncompete agreement.
Aaron
I signed a non-compete agreement in Connecticut with a national academic tutoring company. I was a part time employee. I am planning to move to Minnesota, and I’d like to tutor on my own.
Would Minnesota courts enforce an out of state agreement such as this one?
Colin:
Minnesota courts will enforce non-compete agreements from other states. However, there may be other problems that make your non-compete agreement unenforceable.
Aaron
I started working as an independent recruiter with a recruiting firm two years ago and signed, via email and electronic signature, a non-compete agreement. In the past two years I learned that although I love what I do I no longer wish to work for this company. I would prefer doing this business on my own; at my own pace, without the micro-management.
In reading the agreement it is quite vague and all recruiters are obligated to sign it. In doing some background research I found that many of the former recruiters who left the company are now doing recruiting on their own, or for other companies, and none of them have been sued over the non-compete agreement.
Unfortunately, I am the recruiter who has generated thousands of candidate leads over the last year (at my own expense) and when I leave, this source of information will cease and the owner will have to find this information on his own at his own expense.
Would the fact that he has not sued anyone else who left and went out on their own prior to me leaving; and the fact that the agreement is vague, somewhat ambiguous, and issued from Illinois, give me any assurance that if I do go out on my own, and he decides to enforce the agreement, a court may rule that the agreement is non-enforceable since he cannot pick and chose who he wants to sue?
Can he sue me and not the others without impunity?
Joyce
Joyce:
As a general rule, it does not matter whether an employer sues one or all employees who violate a noncompete agreement.
It does not matter if a noncompete agreement is issued by an employer in another state unless that state prohibits such agreements.
As a general rule, vague and ambiguous clauses or terms in an agreement can be a problem. Courts handle these vague and ambiguous provisions in different ways, depending on the circumstances, evidence, and state in which the court is located.
As for your situation, you should have an attorney analyze your circumstances and noncompete agreement to determine your legal rights and options.
Aaron
Hi Aaron,
I am an owner of a sandwich restaurant in DT Minneapolis. I have a new catering manager who I would like to have sign a non-compete. She has a solid history of being a catering manager in the DT area, but never for a sandwich restaurant. My question is, can we include in the non-compete that she could not work in catering for another restaurant in the DT area? My partner would like to include that but I think that would be preventing her from making a living in the eyes of a court, and thought we should focus on her not managing catering for another sandwich restaurant.
Jen
Jen:
Courts have upheld noncompete agreements with much larger geographic areas than downtown Minneapolis, such as the entire state of Minnesota. The key consideration is to make sure that the geographic area and all other aspects of the noncompete directly protect the interest of the employer.
Your restriction on all catering may be more susceptible to challenge. There are many different types of catering, and if your business isn’t in each of those, a court could question why you are trying to prevent your employee from obtaining a job in other catering areas that do not compete with you. For example, maybe your employee would want to work at a large law firm that does internal catering for its clients and never hires an outside catering company—this would seem to be a situation where there is no competition with your company.
As you can see, drafting noncompete agreements that will be enforceable can be tricky.
Aaron
I’m a Graphic Designer in the Twin Cities… Six months into my job working at an Instore Marketing company I was told if I don’t sign a non-complete I would be fired.. I didn’t receive any compensation for signing it other then to keep my job.. The terms were very vague and didn’t a location perimeter and it was for two years. I recently accepted a job at a similar company.. I’m not going to go after clients, should I be worried since the document was so vague.. Can someone prevent me from trying to make a living at a closer location to where I live?
Next Comments →