Minnesota non-compete law

Pay figure in the law

None found in the statutes we read

Separate rules for professions

None found in the statutes we read

Statutes and official texts quoted

Minn. Stat. § 181.988, subd. 2(a); Minn. Stat. § 181.988, subd. 2(b); Minn. Stat. § 181.988, subd. 1(a); Minn. Stat. § 181.988, subd. 1(c); Minn. Stat. § 181.988, subd. 2(d); Minn. Stat. § 181.988, subd. 3(a); Minn. Stat. § 181.988, subd. 3(b); Laws 2023, ch. 53, art. 6, sec. 1; Minn. Stat. § 181.9881, subd. 2

Is a non-compete allowed?

In Minnesota, any covenant not to compete in a contract or agreement is void and unenforceable, subject to listed exceptions.

“Any covenant not to compete contained in a contract or agreement is void and unenforceable.”
Minn. Stat. § 181.988, subd. 2(a)

Who is covered

'Employee' under the section includes independent contractors.

“"Employee" as used in this section means any individual who performs services for an employer, including independent contractors.”
Minn. Stat. § 181.988, subd. 1(c)

Key terms

The definition of covenant not to compete excludes nondisclosure agreements, trade-secret or confidentiality agreements, and nonsolicitation agreements.

“A covenant not to compete does not include a nondisclosure agreement, or agreement designed to protect trade secrets or confidential information. A covenant not to compete does not include a nonsolicitation agreement, or agreement restricting the ability to use client or contact lists, or solicit customers of the employer.”
Minn. Stat. § 181.988, subd. 1(a)

Exceptions

A covenant not to compete is valid if agreed during the sale of a business or in anticipation of the dissolution of a business.

“Notwithstanding paragraph (a), a covenant not to compete is valid and enforceable if: (1) the covenant not to compete is agreed upon during the sale of a business.”
Minn. Stat. § 181.988, subd. 2(b)

Non-solicitation and no-hire rules

A service provider may not restrict a customer from soliciting or hiring the service provider's employees; such provisions in existing contracts are void (Minn. Stat. § 181.9881, added 2024).

“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.”
Minn. Stat. § 181.9881, subd. 2

If it is challenged

A court may award reasonable attorney fees to an employee enforcing rights under the section, in addition to injunctive relief and other remedies.

“In addition to injunctive relief and any other remedies available, a court may award an employee who is enforcing rights under this section reasonable attorney fees.”
Minn. Stat. § 181.988, subd. 2(d)

Which state’s law and court

An employer may not require an employee who primarily resides and works in Minnesota to adjudicate a Minnesota claim elsewhere or give up Minnesota law protections, as a condition of employment.

“An employer must not require an employee who primarily resides and works in Minnesota, as a condition of employment, to agree to a provision in an agreement or contract that would do either of the following: (1) require the employee to adjudicate outside of Minnesota a claim arising in Minnesota; or (2) deprive the employee of the substantive protection of Minnesota law with respect to a controversy arising in Minnesota.”
Minn. Stat. § 181.988, subd. 3(a)

A violating forum or choice-of-law provision is voidable by the employee at any time, and if voided the matter is decided in Minnesota under Minnesota law.

“Any provision of a contract or agreement that violates paragraph (a) is voidable at any time by the employee and if a provision is rendered void at the request of the employee, the matter shall be adjudicated in Minnesota and Minnesota law shall govern the dispute.”
Minn. Stat. § 181.988, subd. 3(b)

When the rules took effect

The section enacting § 181.988 (Laws 2023, ch. 53, art. 6, sec. 1) is effective July 1, 2023 and applies to contracts entered into on or after that date.

“This section is effective July 1, 2023, and applies to contracts and agreements entered into on or after that date.”
Laws 2023, ch. 53, art. 6, sec. 1

Federal rules

On September 5, 2025, the FTC moved to dismiss its appeals in Ryan, LLC v. FTC and Properties of the Villages v. FTC and to accede to vacatur of the Non-Compete Clause Rule. FTC press release, Sept. 5, 2025

The FTC's final rule removes the Non-Compete Rule (16 CFR part 910) from the Code of Federal Regulations. 91 Fed. Reg. (Feb. 12, 2026), FR Doc. 2026-02866

Before you sign, or before you assume you are bound

1. Find every restrictive clause: non-compete, non-solicitation, no-hire and confidentiality are separate promises with separate rules.
2. Note how long each lasts and what area or customers it covers.
3. Check which state’s law the agreement picks and where disputes must be heard.
4. Compare your pay and your job with the Minnesota rules above.

Check your state with the non-compete checker.

Common questions

Are non-competes enforceable in Minnesota?

In Minnesota, any covenant not to compete in a contract or agreement is void and unenforceable, subject to listed exceptions. (Minn. Stat. § 181.988, subd. 2(a)).