Minnesota Non Compete Agreement
Last month, Ellison cited a group of 20 attorneys general, including four from Republican states, in a letter to the Federal Trade Commission asking them to prohibit employers from imposing non-compete obligations on workers, especially those in low-wage jobs. They said the FTC could move faster than lawmakers in Congress and national parliaments. If the worker has already started work, the employer must, in most cases, make available to the worker something that goes beyond the mere pursuit of employment to impose such a “mid-stream” competition agreement. For example, the employer could grant the worker a significant increase, transportation, a flat-rate increase, incentive pay, access to trade secrets, the transfer of “home accounts” or a written employment contract to protect the worker from dismissal without notice or any other substantial benefit. The courts will ascertain whether employers and workers negotiated the consideration and whether they provided the worker with real and useful benefits. While Minnesota courts will generally reject non-competition prohibitions and carefully consider these claims by employers, an appropriate and necessary non-competition clause may apply. As a 1997 appeals process found, Minnesota employers can use competition prohibitions to protect customer value, confidential information, trade secrets and customer contact. Trade secrets and confidentiality agreements (also known as “privacy agreements”) can be used to protect proprietary information and are not as suspicious. California has banned non-competition for years. Last year, Massachusetts banned it. This year, a mix of democratic and Republican parliaments in seven states has limited non-competitive business in one way or another. North Dakota prohibits them unless an entrepreneur sells his business.
In Florida, a court ruling ended non-competition for doctors. Minnesota law states that non-competition prohibitions in terms of geography and timing are appropriate to be enforced. For example, a non-compete clause cannot cover a longer period than is necessary for the employer to replace and train new workers; nor can it cover a geographic area that exceeds an employer`s actual market area. For example, a 20-year non-compete clause covering the entire United States would most likely not be applicable. Like any contract, non-competitive agreements must be supported by the opposable review (i.e. something valuable obtained in exchange for signing). A job offer can be sufficiently taken into account if the agreement is presented next to the offer. However, the courts will carefully consider the date of publication and implementation of a competition agreement to determine whether a job offer actually depends on the applicant`s performance.
Employers must state in writing that a job offer is conditional on the applicant executing the agreement, provide a copy of the agreement prior to the adoption of the offer, and obtain the agreement signed before the start of the job. In a long-awaited decision, the Minnesota Supreme Court set aside the Court of Appeal and ruled that a non-competition agreement stipulating that the employer would suffer irreparable injury if the worker was injured was not sufficient to establish irreparable harm and therefore could not compel the court to grant a fair discharge.