South Dakota non-compete law

Pay figure in the law

None found in the statutes we read

Separate rules for professions

health care workers, community services providers

Statutes and official texts quoted

S.D. Codified Laws § 53-9-8; S.D. Codified Laws § 53-9-11; S.D. Codified Laws § 53-9-11.2; S.D. Codified Laws § 53-9-11.1; S.D. Codified Laws § 53-9-9; S.D. Codified Laws § 53-9-10; S.D. Codified Laws § 53-9-10.1; S.D. Codified Laws § 53-9-10.1 (source note)

Is a non-compete allowed?

South Dakota makes void any contract restraining a lawful profession, trade or business, except as provided in sections 53-9-9 through 53-9-12.

“Any contract restraining exercise of a lawful profession, trade, or business is void to that extent, except as provided by §§ 53-9-9 to 53-9-12, inclusive.”
S.D. Codified Laws § 53-9-8

An employee may agree not to compete in the employer's business and not to solicit existing customers within a specified county, municipality or area, each for no more than two years after the agreement ends, if the employer continues a like business there (subject to the practitioner rule in 53-9-11.2).

“an employee may agree with an employer at the time of employment or at any time during employment not to engage directly or indirectly in the same business or profession as that of the employer for any period not exceeding two years from the date of termination of the agreement”
S.D. Codified Laws § 53-9-11

Health care and other professions

A contract provision entered into on or after July 1, 2023 that restricts a listed health care practitioner from practicing after employment or a professional relationship ends is voidable.

“Notwithstanding § 53-9-11, a provision of a contract, entered into on or after July 1, 2023, is voidable if it restricts a practitioner, as defined in § 53-9-11.1, from practicing or otherwise providing professional services in accordance with the applicable scope of practice, after the conclusion of the practitioner's employment or after the dissolution of a partnership or other form of professional relationship.”
S.D. Codified Laws § 53-9-11.2

A contract provision entered into on or after July 1, 2026 that restricts a community services provider from serving individuals with developmental disabilities after employment ends is voidable.

“Notwithstanding § 53-9-11, a provision of a contract, entered into on or after July 1, 2026, is voidable if it restricts a community services provider, as defined in § 27B-1-17, from employment in or otherwise providing services to individuals with developmental disabilities”
S.D. Codified Laws § 53-9-11.2

The practitioner rule does not apply to provisions effective on the sale of a practice, or to patient/client non-solicitation provisions that meet the area and time limits of 53-9-11.

“This section does not apply to any contractual provision that: (1) Is effective upon the sale of a practice or interest in a practice; or”
S.D. Codified Laws § 53-9-11.2

Who is covered

Covered practitioners include 28 listed licensed professions, among them physicians, physician assistants, nurses, dentists, pharmacists, psychologists, therapists and counselors.

“(1) A physician licensed in accordance with chapter 36-4; (2) A physician assistant licensed in accordance with chapter 36-4A;”
S.D. Codified Laws § 53-9-11.1

Exceptions

A seller of a business's goodwill may agree with the buyer not to carry on a similar business in a specified county, city or area while the buyer carries on a like business there.

“Any person who sells the good will of a business may agree with the buyer to refrain from carrying on a similar business within a specified county, city, or other specified area, as long as the buyer or person deriving title to the good will from the seller carries on a like business within the specified geographical area.”
S.D. Codified Laws § 53-9-9

Partners may, upon or in anticipation of dissolution, agree not to carry on a similar business in the same municipality or a specified part of it.

“Partners may, upon or in anticipation of a dissolution of the partnership, agree that none of them will carry on a similar business within the same municipality where the partnership business has been transacted or within a specified part thereof.”
S.D. Codified Laws § 53-9-10

In a business entity's governing documents or a contract transferring an ownership interest, parties may agree that an owner will not engage in the same or similar business within the entity's geographic area for up to three years after the transfer.

“the parties may agree that an owner, after the transfer of the interest in the entity, may not engage, directly or indirectly, in the same or similar type of business conducted by the entity during the owner's period of ownership, within the specified geographic area in which the entity conducts business, for a period not exceeding three years from the date of transfer.”
S.D. Codified Laws § 53-9-10.1

Section 53-9-10.1 comes from 2026 South Dakota Session Laws chapter 195.

“Source: SL 2026, ch 195, § 1.”
S.D. Codified Laws § 53-9-10.1 (source note)

Limits on length and area

The customer non-solicitation restriction is likewise limited to a specified area and no more than two years.

“not to solicit existing customers of the employer within a specified county, first- or second-class municipality, or other specified area for any period not exceeding two years from the date of termination of the agreement, if the employer continues to carry on a like business therein.”
S.D. Codified Laws § 53-9-11

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 South Dakota rules above.

Check your state with the non-compete checker.

Common questions

Are non-competes enforceable in South Dakota?

South Dakota makes void any contract restraining a lawful profession, trade or business, except as provided in sections 53-9-9 through 53-9-12. (S.D. Codified Laws § 53-9-8).

Does South Dakota have special non-compete rules for health care workers or other professions?

A contract provision entered into on or after July 1, 2023 that restricts a listed health care practitioner from practicing after employment or a professional relationship ends is voidable. (S.D. Codified Laws § 53-9-11.2).