When Minnesota voided most employee noncompetes entered into on or after July 1, 2023, many employers assumed their whole post-employment playbook was gone. It was not. The ban is narrower than the headlines suggested, and it expressly leaves in place the tools you most likely need: confidentiality agreements, customer and employee nonsolicits, trade-secret protection, invention assignment, and noncompetes tied to the sale of a business.
This guide walks through what the ban covers, whether an older noncompete still binds, what each surviving tool can and cannot do, how state and federal trade-secret law fill the gap, when garden leave makes sense, and the hiring-to-departure routine that makes any of it hold up when a key person leaves.
What exactly does Minnesota’s noncompete ban cover?
The statute’s target is specific. Under Minn. Stat. § 181.988, subdivision 2(a), “Any covenant not to compete contained in a contract or agreement is void and unenforceable.” Subdivision 1(a) defines the covered agreement by what it does: one “that restricts the employee, after termination of the employment, from performing” work for another employer for a specified period, in a specified geographic area, or in a capacity similar to the employee’s work for you. The label on the clause does not matter. The ban reaches independent contractors as well, because subdivision 1(c) defines “employee” to include them.
The enacting session law says the section “is effective July 1, 2023, and applies to contracts and agreements entered into on or after that date” (2023 Minn. Laws ch. 53, art. 6, § 1). A noncompete an existing employee signed on or after that date is covered too.
What the statute does not reach matters as much. The same subdivision 1(a) says a covenant not to compete “does not include a nondisclosure agreement, or agreement designed to protect trade secrets or confidential information,” and “does not include a nonsolicitation agreement, or agreement restricting the ability to use client or contact lists, or solicit customers of the employer.” Subdivision 2(c) adds that a void noncompete does not take down the rest of the contract it sits in, so your NDA and nonsolicit survive even if the noncompete beside them is struck.
Two enforcement provisions give the ban teeth:
- Attorney fees. Under subdivision 2(d), a court may award reasonable attorney fees to an employee who is enforcing rights under the section, so pressing a void noncompete can cost you the other side’s fees.
- Choice of law and venue. Under subdivision 3, you cannot require an employee who primarily resides and works in Minnesota, as a condition of employment, to agree to litigate a Minnesota claim elsewhere or to give up the protection of Minnesota law. Such a clause “is voidable at any time by the employee,” after which the matter is decided in Minnesota under Minnesota law. “Adjudication includes litigation and arbitration,” so an out-of-state arbitration clause does not get around it. Subdivision 3(e) limits this protection to “claims arising under this section.”
In practice, the employer conversations that used to end with “we need a two-year noncompete” now end with a layered package of the surviving tools. That package is usually more defensible, because many of the old noncompetes were overbroad anyway.
Is my non-compete agreement enforceable in Minnesota?
It depends first on the date and then on the deal. A noncompete with an employee signed before July 1, 2023, is not void under § 181.988, because the ban applies only to agreements entered into on or after that date. A noncompete tied to the sale of a business or to dissolving the company is valid whenever signed (see the business-sale section below). Any other employee noncompete signed on or after July 1, 2023, is void.
A pre-ban noncompete still has to pass Minnesota’s common-law test. In Bennett v. Storz Broadcasting Co., 270 Minn. 525, 534, 134 N.W.2d 892 (1965), the Minnesota Supreme Court asked “whether or not the restraint is necessary for the protection of the business or good will of the employer, and if so, whether the stipulation has imposed upon the employee any greater restraint than is reasonably necessary to protect the employer’s business, regard being had to the nature and character of the employment, the time for which the restriction is imposed, and the territorial extent of the locality to which the prohibition extends.” A court can also trim an overbroad clause: in Davies & Davies Agency, Inc. v. Davies, 298 N.W.2d 127, 132 (Minn. 1980), the court upheld a trial court’s “blue pencil” revisions made under the reasonableness test. A pre-ban covenant also needed consideration when signed; one presented after work began needed independent consideration (see National Recruiters, Inc. v. Cashman, 323 N.W.2d 736, 740-41 (Minn. 1982), discussed below).
If you still hold pre-ban noncompetes, manage them actively:
- Track expiration dates. A 12- or 24-month restriction runs from departure. Once it expires, your protection comes entirely from NDAs, nonsolicits, and trade-secret law.
- Assess enforceability now. An overbroad pre-ban clause may be narrowed or may not be enforced at all, so do not count on it as your only protection.
- Do not let it substitute for the other layers. The other tools need to be in place before the noncompete runs out.
How did noncompetes and trade secrets work together before the ban?
Noncompetes and trade-secret law served overlapping purposes. A noncompete kept a former employee away from competitors for a set period, a buffer that limited the chance to use what they knew. The Minnesota Uniform Trade Secrets Act (“MUTSA”) supplied a claim when someone actually misappropriated protected information. Many employers treated the noncompete as their main trade-secret protection: if the employee cannot work for a competitor for two years, the secret is safe.
That approach had weaknesses even before 2023. Noncompetes were often given to employees with no real access to secrets. Enforcement was uncertain under the Bennett reasonableness test. And the signed agreement created a false sense of security that took the place of the operational safeguards MUTSA actually requires, such as access controls, information classification, and exit procedures. The lesson for the post-ban world is that the safeguards were always the real protection, and the agreements now have to support them rather than replace them.
Can I still use a noncompete in a business sale or owner buyout?
Yes, in two situations. Section 181.988 subdivision 2(b) makes a noncompete “valid and enforceable” when:
- It is agreed upon during the sale of a business. The seller, the partners, members, or shareholders, and the buyer “may agree on a temporary and geographically restricted covenant not to compete that will prohibit the seller of the business from carrying on a similar business within a reasonable geographic area and for a reasonable length of time.”
- It is agreed upon in anticipation of dissolving the business. The partners, members, or shareholders, “upon or in anticipation of a dissolution of a partnership, limited liability company, or corporation may agree that all or any number of the parties will not carry on a similar business within a reasonable geographic area where the business has been transacted.”
The sale exception is the one growing Minnesota companies use most. A buyer pays for goodwill, and the seller’s noncompete protects it. Treasury regulations define goodwill as “the value of a trade or business attributable to the expectancy of continued customer patronage,” which “may be due to the name or reputation of a trade or business or any other factor” (26 C.F.R. § 1.197-2(b)(1)). In plain terms, goodwill is the reason customers keep coming back. Everything that builds or enhances goodwill, from reputation to repeat accounts, is what a competing seller could carry away.
The trap is dressing up an ordinary employment restriction as a “sale” clause when the employee is merely receiving equity or a retention bonus. The exception speaks of “the seller of the business,” so a restriction that is really about employment, rather than about a sale, falls back under the general ban.
The dissolution exception is narrower than many founders assume. Its text covers an agreement made “upon or in anticipation of a dissolution” of the entity itself. It does not speak to one partner or member withdrawing while the company carries on, so a departing member is not bound by a noncompete under this exception unless the entity is actually dissolving. For owners, the better tools for a mid-life departure are the confidentiality, nonsolicitation, and buyout terms in your buy-sell agreement or LLC operating agreement.
Is a noncompete agreement an intangible asset?
For a buyer, yes, for federal tax purposes. Under 26 U.S.C. § 197(d)(1)(E), “any covenant not to compete . . . entered into in connection with an acquisition (directly or indirectly) of an interest in a trade or business or substantial portion thereof” is a “section 197 intangible,” alongside goodwill itself under § 197(d)(1)(A). Section 197(a) amortizes an amortizable section 197 intangible “ratably over the 15-year period beginning with the month in which such intangible was acquired.” How the purchase price is split between the noncompete and goodwill has tax consequences for both sides, so your CPA should see the allocation before closing.
What can a Minnesota NDA actually cover after 2023?
A properly drafted nondisclosure agreement (“NDA”) is the foundation of any post-ban package. Section 181.988 subdivision 1(a) excludes “a nondisclosure agreement, or agreement designed to protect trade secrets or confidential information” from the definition of a covenant not to compete. Because an NDA restricts what the employee discloses or uses, not where the employee works, it stays enforceable wherever the employee lands.
Two limits shape what an NDA can cover.
Wages are off-limits. Under Minn. Stat. § 181.172, an employer shall not “require nondisclosure by an employee of his or her wages as a condition of employment,” or require an employee “to sign a waiver or other document which purports to deny an employee the right to disclose the employee’s wages.” The same section preserves your protection of “proprietary information, trade secret information, or information that is otherwise subject to a legal privilege or protected by law,” and it does not let an employee “disclose wage information of other employees to a competitor of their employer.” If you provide a handbook, § 181.172(c) requires it to include notice of these rights. An NDA that defines “confidential information” broadly enough to sweep in an employee’s own pay creates a § 181.172 problem, so carve wages out expressly.
It cannot work as a noncompete in disguise. The statute defines a covenant not to compete by its effect: restricting the employee from “performing” work after employment ends. An NDA whose “confidential information” is so broad that any job in the industry would require using it starts to do the same thing, and it invites the argument that it is a void noncompete under another name. The best predictor of enforceability is narrow, specific category definitions, such as customer pricing, internal margin data, and unreleased product specifications, rather than “all information the employee learns.”
Drafting points for a post-ban NDA:
- Define protected information by category, with enough detail that the employee knows what is restricted.
- Cover both contractual confidential information and statutory trade secrets; the legal standards differ.
- Require return and destruction of confidential materials at departure.
- Spell out remedies, including injunctive relief.
- Carve out the employee’s own wages.
How do nonsolicitation agreements differ from noncompetes?
A noncompete stops a former employee from working for a competitor at all. A nonsolicit stops the employee from going after your customers or recruiting your staff, while leaving them free to take the job. Section 181.988 subdivision 1(a) draws that line in the text, so customer and employee nonsolicits both remain available. The statute carves them out without setting its own reasonableness standard for them; their scope is tested under Minnesota’s common law of restrictive covenants, the Bennett line above.
The customer nonsolicit is the closest functional substitute for the old noncompete: you cannot block the employee from working for a competitor, but you can block them from calling your customers. An employee nonsolicit protects against the “team lift,” where a departing manager brings an entire team to a competitor.
| Clause type | What it can do | What it cannot do |
|---|---|---|
| Customer nonsolicit | Bar active solicitation of your customers for a reasonable period (12 to 24 months is common); tying it to customers the employee serviced or learned about makes it easier to defend | Stop the employee from working for a competitor, or reach so far (a “customer” defined as the whole market) that a court finds it broader than your interest requires |
| Employee nonsolicit (anti-raid) | Bar the departing employee from recruiting coworkers to a new employer | If you are a service provider, bar your customers from hiring your staff (that is void under § 181.9881) |
Because nonsolicits now carry more of the load, precision matters. Define what counts as “solicitation” (does it include answering an inbound call from a customer?), which customers or employees are covered, and how long the restriction lasts. The aggressive scope drafters used in old noncompetes tends not to survive when repurposed into a nonsolicit.
Can my staffing or service-contract template still include a “no-hire” clause?
No, and this is the rule many employers miss. Minn. Stat. § 181.9881, subdivision 2(a), states: “No service provider may restrict, restrain, or prohibit in any way a customer from directly or indirectly soliciting or hiring an employee of a service provider.” A “service provider” is any business “acting directly or indirectly as an employer or manager for work contracted or requested by a customer,” which reaches staffing agencies, consulting firms, outsourced IT, cleaning services, and similar arrangements.
If your master services agreement still says “client agrees not to hire contractor’s personnel for 12 months,” subdivision 2(b) makes that provision of an existing contract void, and subdivision 2(c) requires you to “provide notice to their employees of this section and the restrictive covenant in the existing contract that violates this section.” Subdivision 3 exempts only workers “providing professional business consulting for computer software development and related services” who seek work through the provider intending to be considered for permanent employment with the customer. That exemption does not rescue most service-provider templates. Noncompetes were the headline; the no-hire clause is the one still quietly sitting in older contract libraries.
How do I protect trade secrets under MUTSA?
MUTSA, Minn. Stat. §§ 325C.01 to 325C.08, protects you when a departing employee takes something of competitive value, whether or not they signed an NDA. It runs alongside your contracts and is often the strongest single tool you have left.
What must a trade secret be?
Under § 325C.01 subdivision 5, a trade secret is information, “including a formula, pattern, compilation, program, device, method, technique, or process,” that both “(i) derives independent economic value, actual or potential, from not being generally known to, and not being readily ascertainable by proper means by, other persons who can obtain economic value from its disclosure or use, and (ii) is the subject of efforts that are reasonable under the circumstances to maintain its secrecy.” A trade secret must meet all of the above: value from secrecy and reasonable efforts to keep it secret. Missing either one, the information is not a trade secret.
Independent economic value is usually the easier half: a customer list with pricing history, a proprietary process, a margin model, supplier terms. Reasonable secrecy efforts are where cases are won and lost.
What “reasonable measures” must you take to keep trade-secret status?
The § 325C.01 subdivision 5 standard is “efforts that are reasonable under the circumstances,” so what counts scales with the value of the information and the size of your workforce. A two-person consulting firm and a 200-person manufacturer can both meet it, but neither can meet it with no measures. The statute also says a trade secret “is not negated merely because an employee or other person has acquired the trade secret without express or specific notice that it is a trade secret if, under all the circumstances, the employee or other person knows or has reason to know that the owner intends or expects the secrecy” to be maintained. Labels help, but the circumstances as a whole decide.
Measures that build the record:
- Identify which categories of information are confidential, and mark documents accordingly.
- Restrict electronic access on a need-to-know basis.
- Require an NDA at hire and train employees on what is confidential.
- Keep a written trade-secret policy in the handbook.
- Monitor for unusual downloads or access, especially during notice periods.
- Run a documented exit process (see the departure checklist below).
If the file sat on a shared drive with no access controls, went out by email unmarked, and your handbook said nothing, a court is unlikely to find you made reasonable efforts.
What counts as misappropriation, and what can you recover?
Misappropriation under § 325C.01 subdivision 3 includes acquiring a trade secret by someone who knows or has reason to know it “was acquired by improper means,” and disclosing or using it without consent when the person acquired it under circumstances “giving rise to a duty to maintain its secrecy or limit its use.” “Improper means” under subdivision 2 “includes theft, bribery, misrepresentation, breach or inducement of a breach of a duty to maintain secrecy, or espionage through electronic or other means.” Liability does not depend on a signed agreement.
The remedies:
- Injunction. Under Minn. Stat. § 325C.02, “Actual or threatened misappropriation may be enjoined,” and “In appropriate circumstances, affirmative acts to protect a trade secret may be compelled by court order,” such as returning files.
- Damages. Under Minn. Stat. § 325C.03, damages “can include both the actual loss caused by misappropriation and the unjust enrichment caused by misappropriation that is not taken into account in computing actual loss,” or, “In lieu of damages measured by any other methods,” a reasonable royalty. For “willful and malicious misappropriation,” the court may award exemplary damages “not exceeding twice any award made under paragraph (a).”
- Attorney fees, both ways. Under Minn. Stat. § 325C.04, the court may award reasonable fees to the prevailing party if “a claim of misappropriation is made in bad faith,” if “a motion to terminate an injunction is made or resisted in bad faith,” or if “willful and malicious misappropriation exists.” A weak claim filed to scare a former employee can cost you their fees.
- Deadline. Under Minn. Stat. § 325C.06, an action “must be brought within three years after the misappropriation is discovered or by the exercise of reasonable diligence should have been discovered.”
In practice, the injunction is usually the relief that protects the business; damages come later. Delay weakens the injunction case, so act quickly when you suspect a problem.
How does federal trade-secret law (DTSA) work alongside Minnesota’s protections?
The federal Defend Trade Secrets Act (“DTSA”) gives you a parallel claim. Under 18 U.S.C. § 1836(b)(1), the owner of a misappropriated trade secret may sue “if the trade secret is related to a product or service used in, or intended for use in, interstate or foreign commerce,” and § 1836(c) gives federal district courts original jurisdiction. The remedies in § 1836(b)(3) track MUTSA: an injunction against actual or threatened misappropriation, damages for actual loss plus unjust enrichment or a reasonable royalty, exemplary damages up to “2 times” the damages award for willful and malicious misappropriation, and attorney fees to the prevailing party in the same bad-faith and willful situations. The limitations period in § 1836(d) is also three years from discovery.
The DTSA adds one tool MUTSA lacks. Under § 1836(b)(2), a court “may, upon ex parte application but only in extraordinary circumstances, issue an order providing for the seizure of property necessary to prevent the propagation or dissemination of the trade secret.” The bar is high: among other findings, an ordinary injunction must be inadequate because the person “would evade, avoid, or otherwise not comply with such an order,” and the person would destroy or hide the material if given notice. When the facts fit, seizure is a common reason to file federally rather than only in state court.
The DTSA also has a guardrail that matters after Minnesota’s ban. An injunction may not “prevent a person from entering into an employment relationship,” and any conditions on employment must be “based on evidence of threatened misappropriation and not merely on the information the person knows.” Nor may it “conflict with an applicable State law prohibiting restraints on the practice of a lawful profession, trade, or business.” The federal route does not bring a noncompete back through the side door.
Can I stop a former employee from joining a direct competitor?
Generally, no. Without a valid noncompete, you cannot stop the move itself. You can stop the employee from using or disclosing your trade secrets (NDA, MUTSA, DTSA), from soliciting your customers or staff (nonsolicits), and from keeping your materials (return obligations and an injunction under § 325C.02).
The inevitable disclosure doctrine
Some employers argue that a new role makes disclosure of their secrets inevitable, so the court should enjoin the employee now. In Katch, LLC v. Sweetser, 143 F. Supp. 3d 854, 869-70 (D. Minn. 2015), the federal court in Minnesota observed that “Minnesota courts have not explicitly adopted or rejected the doctrine,” and that where misappropriation is merely threatened, “the moving party must demonstrate ‘a high degree of probability of inevitable disclosure.’” The court added: “Mere knowledge of a trade secret is not enough, even where the person with such knowledge takes a comparable position with a competitor,” and it could not “find a single instance of a moving party meeting the high probability of inevitable disclosure standard and receiving injunctive relief on that basis in Minnesota.” It denied the preliminary injunction.
The Minnesota Supreme Court’s decision in St. Jude Med., Inc. v. Carter, 913 N.W.2d 678, 685 (Minn. 2018), points the same way. The district court there had concluded that the employer’s “argument of inevitable disclosure is belied by the facts” and that the employer had only a “speculative fear of possible disclosure that is unsupported by the evidence.” The Supreme Court found no abuse of discretion in the district court’s refusal to infer irreparable harm, and reversed the court of appeals. Treat inevitable disclosure as a narrow, uncertain backstop. Evidence of actual taking, such as downloads, forwarded files, or customer contact, is what wins the injunction.
Can I require invention-assignment agreements from employees?
Yes, with a Minnesota-specific limit. Under Minn. Stat. § 181.78, subdivision 1, an assignment provision “shall not apply to an invention for which no equipment, supplies, facility or trade secret information of the employer was used and which was developed entirely on the employee’s own time,” and which either does not relate “directly to the business of the employer” or “to the employer’s actual or demonstrably anticipated research or development,” or “does not result from any work performed by the employee for the employer.” A clause reaching such an invention “is to that extent against the public policy of this state and is to that extent void and unenforceable,” and subdivision 2 bars requiring one as a condition of employment.
In practice, an invention can be assigned if it was made with company equipment, supplies, facilities, or trade secret information, or not entirely on the employee’s own time. An own-time invention made without company resources can be assigned only if it both relates to your business or planned research and results from work the employee did for you. The weekend side project on a personal laptop with no connection to your business cannot. Subdivision 3 adds that when an agreement contains an assignment clause, you “must also, at the time the agreement is made, provide a written notification to the employee” of that carve-out. Most national templates leave out this notice, and a short Minnesota paragraph fixes it.
What is garden leave, and should my company use it?
Garden leave is a paid notice period. When the employee resigns, you keep paying them for a set time while they stay employed but do no work, and their existing obligations (confidentiality, nonsolicitation, the duties of a current employee) stay in force.
How it works in practice:
- The employee gives notice of resignation.
- You invoke the garden-leave provision in their agreement.
- The employee stays on payroll for the stated period, often one to six months.
- The employee has no duties but remains bound by every employment obligation.
- You use the time to transition customer relationships, change access credentials, and let sensitive information go stale.
Why it can fall outside the ban. Section 181.988 subdivision 1(a) defines a covenant not to compete as a restriction that applies “after termination of the employment.” Garden leave restrains the employee only while employment continues, so on the statute’s text it is not a covenant not to compete. That conclusion is a reading of the definition rather than a court holding, so draft the provision so that nothing in it reaches past the last day of employment.
Should you use it? Garden leave costs money: you are paying someone not to work. It makes sense for senior employees or technical leads whose trade-secret access or customer relationships justify the expense, and rarely for anyone else. It also has to be planned in advance. Without a contractual basis signed before the resignation, you cannot impose it after the fact.
Should I ask employees with pre-ban non-competes to sign new agreements?
Usually, yes. A pre-ban noncompete protects you only for its stated duration after departure, and only if a court finds it reasonable. Supplementing it now with a well-drafted NDA and nonsolicit means you have enforceable protection when the noncompete expires or fails.
Mid-employment agreements need consideration. In National Recruiters, 323 N.W.2d at 740, the Minnesota Supreme Court held that where a restrictive covenant “is not ancillary to the initial oral employment contract, it can be sustained only if supported by independent consideration.” Quoting Davies, the court said “The adequacy of consideration for a noncompetition contract or clause in an ongoing relationship should depend on the facts of each case,” and found that training already promised as part of the original deal “was not a real advantage bargained for in consideration of signing” (id. at 741). In Davies, by contrast, continued employment combined with “advancement within the agency, and increased responsibility” was enough (id. at 740). A nonsolicit added mid-employment is a restrictive covenant governed by this rule, and the safer course for a mid-employment NDA is the same: pair it with a documented new benefit, such as a raise, a bonus, equity, or a real promotion, stated in the agreement. A new employee noncompete is void regardless of consideration, so this analysis now governs only the agreements the statute leaves enforceable.
How should I restructure employee agreements after the ban?
Step 1: Audit your current agreements
Sort what you have:
- Noncompetes signed before July 1, 2023: still potentially enforceable; track their terms and expiration.
- Employee noncompetes signed on or after July 1, 2023: void; replace them with the tools below.
- NDAs and nonsolicits: test whether each is strong enough to carry the load without a noncompete behind it.
- Service-provider contracts: remove any no-hire clause and send the § 181.9881 notice.
Step 2: Identify what you are actually protecting
Many companies drafted noncompetes without ever naming the trade secrets at stake. Build a trade-secret inventory:
- What information gives you a competitive advantage?
- Who has access to each category?
- What would happen if a competitor obtained it?
That inventory drives every later decision, from who signs what agreement to which security measures each category needs.
Step 3: Draft a layered agreement structure
Instead of one noncompete for everyone, match the agreements to role and access:
- All employees: a confidentiality agreement covering proprietary information (with the wage carve-out), an invention-assignment clause with the § 181.78 notice, and an acceptable-use policy for company systems.
- Employees with trade-secret access: an enhanced NDA naming the specific categories of protected information, a customer nonsolicit for customer-facing roles, an employee nonsolicit for managers and team leads, and a written acknowledgment of trade-secret obligations under MUTSA.
- Key personnel (executives, technical leads, senior sales): all of the above, plus a garden-leave provision and detailed exit and cooperation obligations.
- Multi-state employers: a Minnesota choice-of-law and forum rider for employees who primarily reside and work in Minnesota, given § 181.988 subdivision 3.
Step 4: Implement operational protections
Agreements alone are not enough, because MUTSA protects only information that is “the subject of efforts that are reasonable under the circumstances to maintain its secrecy.” The access controls, monitoring, and exit steps in the infrastructure checklist below are what turn the agreements into a winnable case. With no noncompete as a backstop, these measures matter more than they did before.
What infrastructure has to be in place for any of this to work?
The statutes supply the remedies; your internal routine decides whether you can use them. In a typical departure dispute, the question is rarely whether you had a tool. It is whether you used it before the employee left. The employee who signed an NDA on day one, was reminded of it at departure, and was offboarded on a documented checklist leaves a defensible record. The employee with no NDA, no exit interview, and no written confirmation of what was returned leaves the opposite. The record has to exist before the departure, because you cannot build it afterward.
Before hiring
- Identify the trade secrets the role will access.
- Prepare role-appropriate agreements (NDA, nonsolicit, invention assignment).
- Set access controls before the first day.
During employment
- Limit trade-secret access to need-to-know.
- Mark confidential materials.
- Give annual reminders of confidentiality obligations.
- Monitor for policy compliance with reasonable, disclosed monitoring.
- Update agreements, with fresh consideration, when roles change or access expands.
At departure (the exit checklist)
- Hold an exit interview.
- Collect all company property and devices.
- Deactivate all accounts and revoke system access immediately.
- Document in writing what the employee returned, what was deleted, and what remains confidential.
- Remind the employee in writing of continuing NDA and nonsolicitation obligations.
- Invoke garden leave promptly if the agreement provides for it.
- Preserve access logs and any evidence of unusual activity before the departure.
After departure
- Watch for signs of misuse, such as a sudden customer shift or a competing product announcement.
- If you suspect misappropriation, act fast: MUTSA and the DTSA both offer injunctions, and delay weakens your position.
- Stay close to key customers to reduce solicitation risk.
The companies that handle departures well built the agreements, the handbook, the access controls, and the exit checklist before they had a problem. The ones caught short added each piece after a different incident, and the pieces never quite lined up.
Are any existing noncompetes still enforceable in Minnesota?
Yes, two kinds. The ban in Minn. Stat. § 181.988 applies only to contracts and agreements entered into on or after July 1, 2023, so an older employee noncompete is not void under the statute; a court still tests it under Minnesota’s common-law reasonableness standard. Noncompetes agreed to in the sale of a business or in anticipation of dissolving a partnership, LLC, or corporation also remain valid under subdivision 2(b).
How should a multi-state employer handle Minnesota employees under a national template?
For employees who primarily reside and work in Minnesota, § 181.988 subd. 3 bars requiring, as a condition of employment, a clause that forces a claim arising in Minnesota to be litigated or arbitrated elsewhere or strips away Minnesota law. The employee can void that clause at any time, the dispute then proceeds in Minnesota under Minnesota law, and the court may award the employee attorney fees. The subdivision reaches only claims arising under § 181.988, but a Minnesota rider that applies Minnesota law and a Minnesota forum to those employees avoids the fight.
Does Minnesota's noncompete ban treat physicians or other licensed professionals differently?
No. Section 181.988 contains no exception for physicians, dentists, veterinarians, or any other profession, so a new employment-based noncompete for those workers is void the same way it is for any other employee. The business-sale and dissolution exceptions still apply, so a physician selling a practice can agree to a reasonable noncompete as part of the sale.
Can a Minnesota court narrow an overbroad pre-July-2023 noncompete instead of throwing it out?
It can. In Davies & Davies Agency, Inc. v. Davies, 298 N.W.2d 127 (Minn. 1980), the Minnesota Supreme Court upheld a trial court’s ‘blue pencil’ revisions that cut an overbroad covenant down to a reasonable scope. A court is applying a reasonableness test, though, so you should plan for the possibility that an overreaching clause is simply not enforced.
If a former employee takes documents on the way out, can I get emergency relief without a noncompete?
Often yes. Under Minn. Stat. § 325C.02, actual or threatened misappropriation of a trade secret may be enjoined, and a breach-of-NDA claim can travel with it. The practical limit is the secrecy prong of the trade-secret definition: access controls, confidentiality markings, and a written policy are what make the emergency motion winnable.
Can I sue under the trade-secret act before the employee has actually used my information?
Yes, if you can show the threat is real. Section 325C.02 permits an injunction against threatened misappropriation. Federal courts in Minnesota have held that knowing your secrets and taking a comparable job with a competitor is not enough on its own, so you will want evidence such as downloads, forwarded files, or solicitation.
Do I owe attorney fees if I sue to enforce a noncompete that turns out to be void?
You may. Section 181.988 subd. 2(d) lets a court award reasonable attorney fees to an employee who is enforcing rights under the statute. The trade-secret act cuts both ways too: under § 325C.04 a court may award fees to the prevailing party when a misappropriation claim is made in bad faith.
Does a confidentiality clause stop a former employee from discussing wages?
No. Minn. Stat. § 181.172 bars an employer from requiring nondisclosure of an employee’s own wages or a waiver of the right to disclose them. Proprietary information, trade secrets, and privileged information remain protectable, and the statute does not let an employee give other employees’ wage information to a competitor.
Closing thought
The 2023 ban closed one door and left several open. Keeping customers from being poached, keeping confidential information from walking out, and keeping inventions in the company are all still available through tools the statute expressly preserved, backed by state and federal trade-secret law.
The practical work is replacing a single overbroad clause with a stacked set of narrower ones, building the access and exit routine that makes them enforceable, and cleaning up the service-provider contracts and handbook language that still carry pre-2023 assumptions. For how these pieces fit with day-to-day employment practices, see the Minnesota employment law overview. If you would like a second set of eyes on your current template or a specific departure, email aaron@aaronhall.com with a brief description, and hold any confidential documents until an intake and conflict check are complete.