Courts may also find implied contracts in other circumstances based on the parties’ conduct and communications. Where employees are represented by a union, the employer and the union negotiate a collective bargaining agreement that governs the employment relationship during its term. Non-compete agreements banned Effective July 1, 2023, Minnesota law bans almost all post-employment non‑compete agreements between an employer and an individual worker, including individual independent contractors. For purposes of this law, a “non‑compete agreement” is an agreement that restricts the worker’s ability, after the relationship ends: • To work for another employer for a specified period of time • To work in a specified geographic area; or • To work for another employer in a role or function similar to the one performed for the contracting employer. Two narrow exceptions remain: • Non‑compete agreements entered into in connection with the sale of a business , where the seller agrees not to carry on a similar business within a reasonable geographic area and for a reasonable time; and • Non‑compete agreements entered into in anticipation of the dissolution of a corporation, partnership, or limited liability company , where owners agree not to compete in a similar business in the area where the business operated. The ban applies to non‑competes entered into on or after July 1, 2023 . It does not retroactively void non‑competes signed before that date, which continue to be evaluated under prior Minnesota law for reasonableness and enforceability. The statute expressly provides that a non‑compete agreement does not include: • Non‑solicitation agreements (for example, provisions limiting solicitation of the employer’s customers or employees); • Non‑disclosure or confidentiality agreements; • Agreements protecting trade secrets; or • Agreements restricting use of client lists or other proprietary information. Employers should take care to ensure that these permitted agreements are not drafted so broadly that they function as prohibited non‑competes.
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