Non-Solicitation Clauses in North Dakota: Highly Restricted

North Dakota's Near-Total Ban on Restrictive Covenants

North Dakota is one of the most employee-friendly states in the country when it comes to restrictive covenants. North Dakota Century Code Section 9-08-06 broadly prohibits agreements that restrain anyone from exercising a lawful profession, trade, or business, with very limited exceptions.

The Statutory Rule

Section 9-08-06 states that every contract by which anyone is restrained from exercising a lawful profession, trade, or business of any kind is void to that extent. This sweeping prohibition captures most forms of post-employment restrictions, including many non-solicitation clauses.

Limited Exceptions

The statute provides narrow exceptions:

• Sale of a business: A seller may agree not to solicit the customers of the sold business within a specified geographic area, provided the restriction is reasonable
• Dissolution of a partnership or LLC: Partners or members may agree to non-solicitation provisions as part of the dissolution

Outside these exceptions, non-solicitation clauses in employment agreements are generally void and unenforceable in North Dakota.

What This Means for Employees

If you are an employee in North Dakota (not a business seller or departing partner), a non-solicitation clause in your employment agreement is very likely unenforceable under Section 9-08-06. Even narrowly drawn restrictions on customer solicitation have been challenged under this statute.

Red Flags (for Employers)

• Any non-solicitation clause in a standard employment contract
• Attempts to apply another state's law to circumvent Section 9-08-06
• Non-solicitation provisions in independent contractor agreements for North Dakota workers
• "Non-disclosure" clauses that functionally restrict customer solicitation

When to Consult a Lawyer

Consider speaking with a North Dakota attorney if your employer is threatening to enforce a non-solicitation clause in an employment agreement, if your agreement includes a choice-of-law provision selecting another state's law, or if you are involved in a business sale or partnership dissolution and need to evaluate the non-solicitation terms.

This article is for informational purposes only and does not constitute legal advice. Consult a licensed attorney for guidance specific to your situation.