Non-Solicitation Clauses in Minnesota After the 2023 Ban
Minnesota's 2023 Non-Compete Ban and Non-Solicitation
Minnesota enacted a broad ban on non-compete agreements effective July 1, 2023 (Minnesota Statutes Section 181.988). However, the law specifically exempts non-solicitation agreements from the ban. This means non-solicitation clauses remain enforceable in Minnesota, governed by common law reasonableness standards.
What the Exemption Means
The 2023 law defines a non-compete as an agreement that restricts a worker from working for another employer or operating a business. Non-solicitation clauses, which restrict contact with specific customers or employees rather than all competition, fall outside this definition. However:
- A clause labeled as "non-solicitation" that is so broad it effectively prevents you from working in your field may be treated as a non-compete and subject to the ban
- Courts will look at the practical effect of the restriction, not just its label
Common Law Enforceability Factors
Minnesota courts evaluate non-solicitation clauses based on:
- Legitimate business interest: Protection of customer goodwill, established relationships, or confidential information, as established in Davies & Davies Agency v. Davies
- Reasonable duration: One to two years is the typical enforceable range
- Reasonable scope: Must be limited to customers the employee actually served or had substantial contact with
- Adequate consideration: For new employees, the job suffices. For existing employees, Minnesota courts have generally required independent consideration
- Not broader than necessary: The restriction must be the narrowest means to protect the employer's interest
Red Flags
- A "non-solicitation" clause so broad it effectively prevents all competitive work
- Restrictions on customers you never personally served
- No independent consideration for mid-employment agreements
- Duration exceeding two years
- Language that restricts accepting business from customers who contact you independently
When to Consult a Lawyer
Consider reaching out to a Minnesota employment attorney if you are unsure whether your clause qualifies as a non-solicitation or falls under the 2023 non-compete ban, if you signed a restrictive covenant before July 2023 and want to understand its current status, or if a former employer is threatening enforcement.
This article is for informational purposes only and does not constitute legal advice. Consult a licensed attorney for guidance specific to your situation.