Minnesota Based Legal Services

Non-Compete Agreements &
Non-Solicitation Agreements


Non-Competition (Non-Competes) Agreements - Non-Solicitation Agreements

What is a non-compete covenant? A non-compete covenant is an agreement between an employer and its employee by which the employee agrees not to enter into direct or indirect competition with the employer following the cessation of the employment relationship.

What are the restrictions in a non-compete agreement? Typically, a non-compete agreement will include related provisions, such as:

• A non-solicitation covenant (prohibits a former employee from soliciting the employer’s
• current and prospective customers);

• A trade secret/confidentiality provision (prohibits a former employee from using or
• disclosing the employer’s confidential or proprietary information);

• An anti-raiding provision (prohibits a former employee from hiring away the employer’s
• other employees); or

• A shop rights provision (gives the employer ownership rights to any inventions created by
the employee during the employment relationship).

Are non-compete agreements enforceable? Yes. To be enforceable, a non-compete covenant
must: (A) be supported by independent consideration; (B) protect a legitimate employer interest; and (C) be reasonable in scope, duration, and geographic territory.

How are non-compete agreements enforced? The employer will typically file a lawsuit and request a temporary restraining order/preliminary injunction. Minnesota state courts consider five factors in deciding whether to grant a temporary restraining order/preliminary injunction:

• The relationship between the parties before the dispute;

• The harm the plaintiff will suffer if relief is denied compared with the damage inflicted on the defendant if the injunction is issued;

• The likelihood that one party will prevail on the merits.

• The public interest that is involved.

• The administrative burdens involved in enforcing the relief requested.


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