EMPLOYMENT CONTRACTS Employment contracts may be written or oral. Employment contracts may be provided to employees who would not otherwise accept employment without the security of a contract, or in cases where the employer wishes to secure certain protections, such as the protection of confidential information or trade secrets. Employment contracts typically set forth the term or length of employment, compensation and benefits, job duties, and circumstances for termination. Some contracts also may include provisions relating to confidentiality, assignment of intellectual property rights like patents or copyrights, and non-compete agreements. In recent years, Minnesota courts have used contract-based theories to carve out exceptions to the employment at will doctrine for public policy reasons. For example, the courts have found a contract to exist where the employee provides something of value, in addition to performing the job, in exchange for a promise of continued employment. A contract also has been found where the employee, in reliance on an offer of employment, gave up another job to accept employment. Most recently, Minnesota courts have determined that statements in a personnel handbook may create an enforceable contract if the terms are sufficiently definite, are communicated to the employee, and the employee accepts the terms and provides value by continuing to work. Implied contracts may be found to exist in other situations. In cases where employees are represented by a union, the employer and the collective bargaining agent negotiate a contract which governs the relationship of the parties throughout its term. NON-COMPETE AGREEMENTS BANNED Effective July 1, 2023 a new Minnesota law bans almost all post-employment non-compete agreements between an employer and an individual employee (to include individual independent contractors). For purposes of the law a non-compete agreement is an agreement that restricts the ability of the employee or independent contractor to engage in certain activities after the termination of his or her employment or contractual engagement: • To work for another employer for a specific period of time; • To work in a specific location or geographical area; • To work for another employer in a role or function that is similar to the role or function the employee performed for the contracting employer. There are two exceptions to the prohibition: non-compete agreements that are greed to during the sale of a business, and non-compete agreements that are entered into in anticipation of the dissolution of a corporation, partnership, or Limited Liability Company. For purposes of the law a non-compete agreement does not include a non-solicitation agreement; a nondisclosure agreement; an agreement for trade secret protection; an agreement restricting use of the employer’s client lists. PROTECTION OF CONFIDENTIAL INFORMATION Minnesota law protects employers‘ confidential information and trade secrets in several ways. First, an employee has a generally recognized duty of loyalty to not disclose trade secrets or proprietary information of the employer. Second, the statutory Uniform Trade Secrets Act,
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