Understanding the New Legislation
In May 2023, the state of Minnesota passed a significant new law concerning non-compete agreements. A bill was signed that largely restricts new non-competition agreements between employers and their employees or independent contractors. Starting on July 1, 2023, almost all non-compete agreements prohibiting former employees from working for a competitor after he or she leaves, will be outlawed, marking a major shift.
What Exactly Is a Non-Compete Agreement?
To comprehend the implications of this new legislation, one must first understand what a non-compete agreement encompasses. At its core, a non-compete agreement is a contract between the employer and employee. This contract usually ensures that an employee cannot engage in what the employer defines as a competitive business for a specified duration (1 year is common) after the employee leaves or is terminated.
Are There Any Exceptions?
Even though the legislation is comprehensive and largely bans almost all non-compete agreements signed after July 1, 2023, it doesn’t completely eradicate all of them. The two primary exceptions to this rule include:
- Non-compete clauses that are part of a business sale.
- Provisions established in light of a business’s anticipated dissolution.
What Does This Mean for Employees?
This new law is being celebrated as a game-changer, especially by organizations and entities advocating for employee rights. MJSB Employment Justice applauds the passage of this new law.
If an individual feels that their non-compete agreement might be infringing on their rights or if they have questions about their current agreement’s validity, it’s imperative to seek legal counsel. Our experienced employment attorneys can provide valuable legal insight during a confidential consultation to ensure that the employee’s rights are protected. Contact MJSB Employment Justice today to speak with an attorney about the new Minnesota non-compete law.