Non-compete agreements signed on or after July 1, 2023, are not enforceable in Minnesota. Under Minn. Stat. § 181.988, any covenant not to compete in an employment contract is void from the moment it’s signed, and the ban covers independent contractors as well as traditional employees.1Minnesota Office of the Revisor of Statutes. Minnesota Code 181.988 – Covenants Not to Compete Void in Employment Agreements; Substantive Protections of Minnesota Law Apply Older agreements, signed before that date, are still governed by the reasonableness standard Minnesota courts applied for decades, and two narrow exceptions survive for business sales and dissolutions.
So the answer depends on one date. If your contract was signed on or after July 1, 2023, the non-compete clause carries no legal weight. If it was signed earlier, your employer can still try to enforce it, and whether they succeed depends on how the clause reads.
What Counts as a Non-Compete Under the Statute
The law defines a covenant not to compete as any agreement that, after you leave a job, restricts you from working for another employer for a set time, working in a particular geographic area, or performing similar work for someone else.1Minnesota Office of the Revisor of Statutes. Minnesota Code 181.988 – Covenants Not to Compete Void in Employment Agreements; Substantive Protections of Minnesota Law Apply The definition is broad on purpose. It covers the classic “you can’t work in this industry for two years” clause, the “you can’t work within 50 miles” clause, and everything in between.
The statute treats independent contractors as employees for this purpose. Freelancers, consultants, and gig workers get the same protection as W-2 staff. How the company classifies the relationship doesn’t matter.1Minnesota Office of the Revisor of Statutes. Minnesota Code 181.988 – Covenants Not to Compete Void in Employment Agreements; Substantive Protections of Minnesota Law Apply
If a contract contains a void non-compete alongside other terms, only the non-compete falls out. The rest of the agreement stays in force.1Minnesota Office of the Revisor of Statutes. Minnesota Code 181.988 – Covenants Not to Compete Void in Employment Agreements; Substantive Protections of Minnesota Law Apply
Non-Competes Signed Before July 1, 2023
The ban does not reach backward. A non-compete you signed in 2020 is still governed by the legal standards that existed when you signed it, and a former employer can still take you to court over it.
For those older agreements, Minnesota courts apply a reasonableness test that weighs the nature of the employment relationship, the duration of the restriction, and the geographic scope. A one-year restriction within a metropolitan area to protect genuine trade secrets might survive scrutiny. A five-year nationwide ban for a mid-level sales role probably wouldn’t. Courts also look at whether the restriction protects a legitimate business interest — customer relationships, confidential information, or specialized training the employer paid for — rather than simply locking a worker out of their field.
The practical split is clean. Pre-July 2023 non-compete: evaluate it under the old framework and be ready to challenge unreasonable terms in court. Post-July 2023: disregard it.
Two Narrow Exceptions: Business Sales and Dissolutions
The ban has carve-outs, but both involve owners rather than employees.
The first covers the sale of a business. When someone buys a company, they’re paying for its customer base and market position, and without a non-compete the seller could pocket the price and open a competing shop the next week. Buyers and sellers, along with partners, members, or shareholders, can agree to a temporary, geographically limited restriction on competing.1Minnesota Office of the Revisor of Statutes. Minnesota Code 181.988 – Covenants Not to Compete Void in Employment Agreements; Substantive Protections of Minnesota Law Apply
The second applies when a partnership, LLC, or corporation is dissolving. The owners can agree among themselves that some or all of them won’t start a competing business in the same geographic area the old business served.1Minnesota Office of the Revisor of Statutes. Minnesota Code 181.988 – Covenants Not to Compete Void in Employment Agreements; Substantive Protections of Minnesota Law Apply
Both exceptions have to be reasonable in duration and geographic scope. The statute doesn’t set hard numbers, so courts retain discretion to strike down overreach. Note also that no minimum ownership threshold applies. Any partner, member, or shareholder involved in the sale or dissolution can be bound, not just those selling a majority stake.
What Employers Can Still Require You to Sign
The ban eliminates one specific tool. Several others are untouched, and understanding the difference matters when you’re reviewing a contract.
- Non-disclosure agreements are excluded from the ban. If you had access to proprietary formulas, internal financials, or strategic plans, your employer can hold you to confidentiality after you leave.1Minnesota Office of the Revisor of Statutes. Minnesota Code 181.988 – Covenants Not to Compete Void in Employment Agreements; Substantive Protections of Minnesota Law Apply
- Trade secret protections remain enforceable and often carry broader remedies, including injunctions and damages, if you misuse proprietary knowledge.1Minnesota Office of the Revisor of Statutes. Minnesota Code 181.988 – Covenants Not to Compete Void in Employment Agreements; Substantive Protections of Minnesota Law Apply
- Non-solicitation agreements are carved out by name. A clause prohibiting you from contacting your former employer’s clients, or recruiting their staff, is still enforceable.1Minnesota Office of the Revisor of Statutes. Minnesota Code 181.988 – Covenants Not to Compete Void in Employment Agreements; Substantive Protections of Minnesota Law Apply
A non-compete says you can’t work for a competitor. A non-solicitation says you can work anywhere, just not with our clients. An NDA says you can work anywhere, just don’t share what you learned here. The first is void; the second and third are enforceable. Employers who try to disguise a non-compete as an overly broad NDA or non-solicit — one so sweeping it effectively bars you from using any skill from the job — risk having the clause challenged as a prohibited covenant not to compete.
Out-of-State Choice-of-Law Clauses Don’t Get Around the Ban
A protection is only as strong as its enforcement, and the statute closes the obvious loophole. An employer cannot require someone who primarily resides and works in Minnesota to agree to a contract that forces disputes into another state’s courts or strips away Minnesota law’s protections.1Minnesota Office of the Revisor of Statutes. Minnesota Code 181.988 – Covenants Not to Compete Void in Employment Agreements; Substantive Protections of Minnesota Law Apply
If your employment agreement says any dispute has to be resolved in Texas under Texas law, you can void that provision. The statute calls it “voidable at any time by the employee,” so you’re not stuck because you didn’t object when you signed. You can raise it when a dispute actually comes up.1Minnesota Office of the Revisor of Statutes. Minnesota Code 181.988 – Covenants Not to Compete Void in Employment Agreements; Substantive Protections of Minnesota Law Apply
What “primarily reside and work” means isn’t defined in the statute. Someone who lives in Minneapolis and commutes to a Minnesota office is an easy case. Remote workers splitting time between states are less clear, and a challenge would turn on the specific facts.
Remedies If an Employer Tries to Enforce a Void Non-Compete
If your employer sues on a void non-compete or ignores the choice-of-law protections, a court can issue injunctive relief and award any other available remedies. The court may also award reasonable attorney fees.1Minnesota Office of the Revisor of Statutes. Minnesota Code 181.988 – Covenants Not to Compete Void in Employment Agreements; Substantive Protections of Minnesota Law Apply
The word is “may,” so fee awards are discretionary rather than automatic. Still, the provision changes the math. An employer sending a threatening cease-and-desist letter over a clearly void post-2023 clause faces the real possibility of paying the employee’s legal costs when the employee pushes back. If your former employer threatens legal action, contacts your new employer, or withholds final pay based on a void non-compete, document everything and talk to an employment attorney.
No Federal Backup
The Federal Trade Commission tried to impose a nationwide non-compete ban in 2024. That effort failed after multiple federal courts ruled the FTC had exceeded its authority, and in February 2026 the Commission officially removed the rule from the Code of Federal Regulations.2Federal Register. Revision of the Negative Option Rule, Withdrawal of the CARS Rule, Removal of the Non-Compete Rule To Conform These Rules to Federal Court Decisions The FTC still pursues individual cases against specific companies for anticompetitive practices, but the blanket ban is gone.3Federal Trade Commission. Noncompete
Enforceability now depends entirely on the state where you work. Minnesota workers are covered by the 2023 ban. If you move to another state or take a remote job based elsewhere, don’t assume the same protections travel with you.