Minnesota non-compete ban (post-2023)

Counteroffer · Answers · non-compete Source: https://trycounteroffer.com/answers/minnesota-non-compete-ban

Short answer: Minnesota broadly banned employee non-competes signed on or after July 1, 2023 under Minn. Stat. § 181.988. The ban applies to all employees regardless of salary or role. Customer non-solicits, employee non-solicits, and confidentiality agreements remain enforceable. Non-competes signed before July 1, 2023 are evaluated under prior Minnesota common-law reasonableness standards.

The 2023 ban

Effective July 1, 2023, Minnesota enacted Minn. Stat. § 181.988, which broadly prohibits employee non-competes. The statute reads:

No covenant not to compete may be enforced against an employee in this state in any agreement entered into on or after July 1, 2023.

The ban applies to:

All employees regardless of salary level
All industries (with narrow exceptions for the sale of a business)
Agreements signed on or after July 1, 2023

This placed Minnesota alongside California, North Dakota, and Oklahoma as states that broadly void employee non-competes.

What's still enforceable

The statute is specifically limited to non-competes. Several other restrictive covenants remain enforceable under prior law:

Customer non-solicits: Continue to be enforceable under reasonableness standards
Employee non-solicits (no-raid): Continue to be enforceable
Confidentiality and trade secret agreements: Fully enforceable under the Minnesota Uniform Trade Secrets Act (Minn. Stat. § 325C.01 et seq.)
Non-competes in sale-of-business contexts: Still enforceable with reasonable scope

Employers in Minnesota have responded by relying more heavily on customer non-solicits and trade secret protections. These tools can achieve much of what a non-compete would have done in protecting customer relationships and proprietary information.

Pre-2023 agreements

Non-competes signed before July 1, 2023 are not voided by the statute. They continue to be evaluated under Minnesota's prior common-law reasonableness standard, which considered:

Whether the restriction was no broader than necessary to protect the employer's legitimate business interest
Whether the duration, geography, and activity scope were reasonable
Whether the employee received adequate consideration
Whether enforcement would impose undue hardship

Minnesota courts have generally been skeptical of non-competes even under prior law, blue-penciling or voiding agreements with broad geographic scope, lengthy durations, or insufficient consideration.

If you're under a pre-July 2023 Minnesota non-compete, the agreement is not automatically void, but standard reasonableness defenses remain available.

Choice-of-law concerns

The statute applies to agreements that would be enforced "against an employee in this state." This addresses the common scenario where an out-of-state employer with a non-compete-friendly jurisdiction's choice-of-law clause attempts to enforce against an employee working in Minnesota.

For agreements signed after July 1, 2023 by employees working in Minnesota, the Minnesota statute likely overrides any contrary choice-of-law clause. The exact contours of this analysis are still developing in case law.

For remote workers, the relevant question is where the employee actually performs the work. An employee who lives and works in Minnesota is protected by the statute even if employed by an out-of-state company under a contract designating another state's law.

Comparison with California

Minnesota's 2023 ban is similar in effect to California's § 16600 but with some differences:

Feature	California	Minnesota
Effective date	Long-standing; 2024 amendments strengthen	July 1, 2023
Customer non-solicits	Void under AMN Healthcare (2018)	Enforceable
Choice-of-law override	Explicit (SB 699, 2024)	Implicit; developing case law
Notice obligation to former employees	Yes (AB 1076, 2024)	No
Pre-effective-date agreements	Have been void for decades	Subject to prior reasonableness standards

The Minnesota ban is narrower than California's because it leaves customer non-solicits intact. For employees in Minnesota, customer non-solicits remain a meaningful restriction even after the non-compete ban.

What to do next

If you signed a non-compete in Minnesota on or after July 1, 2023, it's unenforceable. Document the signing date carefully.

If you signed before July 1, 2023, the agreement is evaluated under prior reasonableness standards. Many such agreements remain vulnerable to challenge on scope or consideration grounds.

If you want a delivered analysis of your specific Minnesota agreement, with cited authority and a clear verdict, we deliver one in 24 hours for $199. See Non-Compete Review.

Sources

Minn. Stat. § 181.988 (Minnesota non-compete ban)
Minn. Stat. § 325C.01 et seq. (Minnesota Uniform Trade Secrets Act)
Pre-2023 Minnesota case law on reasonableness (e.g., Bennett v. Storz Broadcasting Co., 270 Minn. 525 (1965))

Get your contract reviewed

If you want a delivered review of your specific document with cited authority and counter language, see https://trycounteroffer.com/non-compete.

Last updated: Sun May 31 2026 00:00:00 GMT+0000 (Coordinated Universal Time)

Counteroffer is a contract analysis service, not a law firm. This page is informational, not legal advice.