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Non-Compete Issues

A non-compete agreement is a contract that prohibits an employee from competing against their employer. This agreement may prohibit competition during employment, after employment, or both. It will typically prevent competition for a specific period of time and within a specific geographic region.

If you need to draft a non-compete agreement, have your current non-compete agreement reviewed, or need advice on the application of a non-compete agreement, you need the help of a Mankato employment law lawyer well versed in employment law and non-compete matters.

The Contents Of Non-Compete Agreements

The contents of non-compete agreements can include any of the following:

  • A non-competition clause that prohibits the employee from engaging in any activity that is considered competitive before and/or after employment.
  • A non-solicitation of customers clause that prohibits the employee from soliciting the employer’s customers during the employment and/or for a certain period of time after employment ends.
  • A non-disclosure of proprietary or confidential information clause that prohibits the employee from disclosing the employer’s confidential information. This includes trade secrets and other proprietary information.
  • A non-solicitation of employees clause that prohibits the employee from leaving the company and then soliciting other employees to join them. Another name for this is a “non-recruitment” or “non-hire” clause.

There may be other clauses in the agreement as well, depending on the industry. For instance, a doctor may be allowed to practice in an office with multiple doctors and have an office at another location. However, the doctor may have agreed to not locate his or her office within a specific distance of the group office.

If any clauses are violated, the employer has a right to take action against the employee or former employee for damages incurred because of the violation, and can even seek an injunction from the court, severely limiting the employee’s options.

Helping You With Non-Compete Challenges in Minnesota

In Minnesota, non-compete agreements are very closely scrutinized. In fact, they are disfavored because they are seen as restraining trade. Such agreements prevent employees from flowing between companies. Nonetheless, the agreements are enforceable, despite this close scrutiny, so long as they serve a legitimate employer interest and are not broader than necessary to protect that interest.  Courts often look to the following factors in deciding whether to enforce a non-compete clause:

  • Whether the employer interest is legitimate.
  • Whether there was adequate legal consideration to support the document.
  • Whether the non-compete agreement is reasonable in geography, duration, and scope.

If the matter goes to court and the court determines that the non-compete agreement is too broad or unreasonable, the court can narrow the agreement to make it more reasonable. This is called the “Blue Pencil Doctrine.” In other words, the court has significant latitude when it comes to enforcing non-compete agreements, especially when the employer’s interests are legitimate.

Contact A Mankato Employment Law Lawyer

If you are dealing with a non-compete matter, it is important to speak with an attorney as soon as possible to preserve and/or enforce your rights. To learn more, contact Farrish Johnson Law Office, CHTD at 507-625-2525 to request a free consultation.