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Are noncompetition agreements legal here in Minnesota?

When we wrote on the topic of noncompetition agreements last, which was back in October in one of our blog posts, we talked with our Twin Cities readers about the level of complexity that this type of clause can add to contractual agreements. In some cases, employees may not even be aware that they are signing such an agreement because it’s buried in a standard employment contract. In other cases, a person may not consider its importance until after they are trying to seek new employment in the same career field.

Whatever may be the case, noncompetes can lead to confusion and even litigation. For some of our readers, they may even lead to an important question we are going to answer in today’s blog post: are noncompetition agreements legal here in Minnesota?

The simple answer to the question is yes. According to current state laws, employers have the right to ask an employee to sign a non-competition agreement, which prohibits both current and former employees from disclosing any information about the business that otherwise gives it an edge over its competitors.

State law is specific though: noncompetes must “protect a legitimate interest of the employer, are supported by adequate consideration, and are reasonably limited in scope and in time.” As an example, this means that an employee who signs a noncompetition agreement is not allowed to share trade secrets or copyrights with competitors either during employment and/or for a specific amount of time after employment has been terminated.

Although noncompetition agreements are typically signed by executives or people with high-security jobs, as long as the agreement falls within the parameters of the law and the company can show the courts reasonable need for such an agreement, then it could be found at any level of employment. As with the Jimmy John’s case, which we talked about back in October, this creates a source of contention among low-wage workers who feel oppressed by employers who enforce such covenants when they don’t seem necessary.