Clients often ask me whether a non-compete agreement is enforceable in Minnesota. The answer is simply yes, in general. Unlike some states, like California, Minnesota law generally recognizes a non-compete agreement.
Now there are some exceptions to that. For example, if you’re an employee who has signed a non-compete agreement after entering into employment, and not been paid anything extra to sign that, you may be able to get out of that non-compete agreement. In other words the non-compete agreement may not be enforceable.
Also a non-compete agreement in Minnesota may not me enforceable as broadly as it was written. If the scope is considered too broad by a court, a court can apply the Blue Pencil Doctrin. Again the Blue Pencil Doctrine will narrow the scope of an agreement and enforce it to the extent that it would have been enforceable in Minnesota had it been written with the proper scope. For example, if you’re an employee with a world wide non-compete, in other words it says you can’t compete world wide, a Minnesota court will likely say that it’s too broad, but say it is going to be enforceable in the state of Minnesota. That’s an example of the Blue Pencil Doctrine being applied. Imagine the court using a blue pencil to re-write that agreement to represent the scope that would be enforceable under Minnesota law.
Non-compete agreements are generally examined by a court by determining whether the employer’s interest is correctly represented in the non-compete agreement or if the employer is trying to punish the employee and simply prevent the employee from getting work anywhere. Because of this, the analysis is quite complex and it generally makes sense to have an attorney examine a non-compete before assuming that it’s not enforeceable. At our law firm we will examine a non-compete agreement, take a look at the likelihood it would be enforced and what aspects would be enforced, and then explain to the employee that person’s legal rights and options with dealing with that non-compete agreement.