If you signed a Minnesota noncompete on or after July 1, 2023, it is void — and that does not touch your NDA

The date on the signature line decides it

Minnesota banned employment noncompetes in 2023, and the ban is not retroactive. Everything about your situation turns on when the agreement was entered into.

The ban itself lives in Minn. Stat. § 181.988. The date does not — it lives in the session law that created the section, Laws 2023, ch. 53, art. 6, § 1, which ends with an effective-date clause:

This section is effective July 1, 2023, and applies to contracts and agreements entered into on or after that date.

Read the codified section alone and you will not find that sentence, which is why so many summaries of the ban either omit the date or get it wrong. The statutory trigger is the date the agreement was entered into, which for most people is the date they signed it. Find that date before you do anything else.

What § 181.988 bans

Subdivision 2(a) is one line:

Any covenant not to compete contained in a contract or agreement is void and unenforceable.

“Covenant not to compete” is defined, and the definition is narrower than the phrase sounds. Subdivision 1(a):

“Covenant not to compete” means an agreement between an employee and employer that restricts the employee, after termination of the employment, from performing:

(1) work for another employer for a specified period of time;

(2) work in a specified geographical area; or

(3) work for another employer in a capacity that is similar to the employee’s work for the employer that is party to the agreement.

Three things follow from the text. The restriction has to bite after termination of the employment — a clause governing what you do while still employed is outside the definition. It has to be an agreement between an employee and an employer. And “employee” is defined in subdivision 1(c) to include independent contractors, with subdivision 1(d) reaching the LLC an employer made you form as a condition of getting paid. The statute closed that door on the way through.

Two exceptions survive in subdivision 2(b), and neither is about ordinary employment. A noncompete is still valid if it is “agreed upon during the sale of a business,” where the statute permits a “temporary and geographically restricted” covenant limited to “a reasonable geographic area and for a reasonable length of time.” A noncompete is also valid if it is “agreed upon in anticipation of the dissolution of a business,” where the statute limits the restraint to “a reasonable geographic area where the business has been transacted” and states no time limit. Both are transactional. Neither reaches the packet handed to you on your first day.

What it does not reach

Subdivision 1(a) closes with two sentences that decide more real disputes than the ban does:

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.

And subdivision 2(c) keeps the rest of the paperwork standing:

Nothing in this subdivision shall be construed to render void or unenforceable any other provisions in a contract or agreement containing a void or unenforceable covenant not to compete.

One neighboring section is worth knowing exists. Minn. Stat. § 181.9881, enacted the following year, voids a different animal: a term in a service contract by which a staffing or service company restricts its customer from soliciting or hiring the service company’s employee. Subdivision 2(b) makes such a provision in an existing contract void and unenforceable, and subdivision 2(c) requires the service provider to notify its employees when a contract contains one. That is a restriction between two businesses over you, not one you signed.

Out-of-state law and out-of-state courtrooms

Subdivision 3 addresses the workaround: write the agreement so it is governed by a state that still enforces noncompetes, and require suit there.

(a) 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.

A provision that violates paragraph (a) is “voidable at any time by the employee” under subdivision 3(b), and once the employee voids it, the statute directs that the matter be adjudicated in Minnesota under Minnesota law. Subdivision 3(d) puts arbitration inside the definition of “adjudication,” so an arbitration clause seated in Delaware is not outside the reach of the paragraph.

Subdivision 3(e) is the limit, and it is a real one: “This subdivision applies only to claims arising under this section.” The choice-of-law and venue protection is tied to section 181.988. It does not give you a Minnesota forum for every dispute with your employer.

Attorney fees

Subdivisions 2(d) and 3(c) each provide that 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.” The verb is may. A fee award under § 181.988 is discretionary, and the statute attaches no fee-shifting to an employer who wins.

If you signed before July 1, 2023

Then § 181.988 does not apply to your agreement, and you are back in the common law — which is not a rubber stamp for the employer. In Bennett v. Storz Broadcasting Co., 270 Minn. 525, 134 N.W.2d 892 (1965), deciding whether a restrictive covenant justified an employer’s interference with its former announcer’s new job, the court said such agreements are

looked upon with disfavor, cautiously considered, and carefully scrutinized

and set the test:

whether or not the restraint is necessary for the protection of the business or good will of the employer, and if so, whether the stipulation has imposed upon the employee any greater restraint than is reasonably necessary to protect the employer’s business, regard being had to the nature and character of the employment, the time for which the restriction is imposed, and the territorial extent of the locality to which the prohibition extends.

The court added that “[t]he validity of the contract in each case must be determined on its own facts and a reasonable balance must be maintained between the interests of the employer and the employee.”

There is a second, blunter common-law question that has nothing to do with reasonableness: was the covenant paid for at all. In National Recruiters, Inc. v. Cashman, 323 N.W.2d 736 (Minn. 1982), recruiters were hired, agreed on terms, started work, and were handed a noncompetition clause afterward and told to sign it. The supreme court held:

Where such a covenant is not ancillary to the initial oral employment contract, it can be sustained only if supported by independent consideration.

Continued employment by itself was not enough on those facts. The court held the clause “invalid because it was unsupported by such additional independent consideration,” and because there was no valid covenant, there was no breach and no forfeiture of the employees’ vested profit-sharing interests. Whether a given case comes out that way depends on its own record. Two years earlier, in Davies & Davies Agency, Inc. v. Davies, 298 N.W.2d 127 (Minn. 1980), the same court reached opposite results for two employees of the same agency. For the first, ten years of continued employment plus advancement to a selling position that “would not have been open to him if he had not signed the contract” was adequate consideration. Id. at 131. For the second, who was not shown the agreement or told he had to sign it until eleven days after he started work, the covenant was “without consideration and unenforceable.” Id. at 133. The rule Davies drew from the contrast: “[t]he adequacy of consideration for a noncompetition contract or clause in an ongoing employment relationship should depend on the facts of each case.” Id. at 130.

One more feature of the pre-2023 world cuts against the employee, and leaving it out would misdescribe the risk. Finding an old covenant overbroad does not necessarily kill it. In Klick v. Crosstown State Bank of Ham Lake, Inc., 372 N.W.2d 85 (Minn. Ct. App. 1985), the court of appeals described the doctrine:

Under the blue pencil doctrine as it has developed in Minnesota, a court can take an overly broad restriction and enforce it only to the extent that it is reasonable.

The source of the doctrine in employment cases is Davies, where the supreme court approved a trial court’s rewriting of an overbroad covenant rather than striking it: “in employment cases, a court should be permitted to make changes such as those made by the trial court in this case rather than be compelled to strike down the entire agreement as unreasonable.” Davies, 298 N.W.2d at 131 n.1. Klick supplies the limit — “While it is certainly within the power of the trial court to modify this contract, no cases say that a court must do so” — and affirmed a refusal to rewrite. A pre-July-2023 covenant that reaches too far may be cut down to a size a court will enforce rather than struck.

What did not change in 2025 or 2026

The revisor’s History line for § 181.988 reads, in full, “2023 c 53 art 6 s 1.” The section has not been amended since it was enacted. Checked against the revisor’s table of Minnesota Statutes affected by the 2026 Regular Session, the 2026 legislature amended eight sections in chapters 181, 268, and 363A — §§ 181.101, 181.211, 268.19, 268.193, 363A.02, 363A.07, 363A.08, and 363A.29 — and no section of chapter 177 at all. Section 181.988 was not among them. The ban, its two exceptions, and the choice-of-law subdivision read today exactly as they read on July 1, 2023.

This page describes the machinery. Which side of the July 1, 2023 line your agreement falls on, and what the clause in front of you actually restricts, are questions about your document, and applying the statute to it is not what this page does.