Non-Compete Agreement Review Checklist — Minnesota

Confirm both sides are named in the cover terms and that the named employer is the entity the worker actually serves. Minnesota's statute runs to anyone who performs services for an employer — independent contractors included — so an agreement papered through an affiliate or a consulting entity changes nothing about which rules apply, and a mismatched entity name only muddies who owes what to whom.

In Minnesota the date is the single most consequential term on the page. An agreement entered into on or after July 1, 2023 sits under a statute that voids covered non-competes outright, while an earlier agreement is still measured against the older case-law framework. An undated or ambiguously dated agreement leaves the reviewer unable to say which body of law governs — resolve that before reading anything else. A.1A.2

Record the role, but do not expect it to change the outcome. Minnesota's ban carries no salary threshold and no executive or professional carve-out — a covered non-compete is void for the chief technology officer on the same terms as for an hourly worker. Title and duties still inform whether the surviving covenants are sensibly scoped to what the worker actually touched. A.3

Check that a governing state is stated — and read any selection of another state's law for a Minnesota-based employee as a warning sign rather than a workaround. The statute bars conditioning employment on terms that strip a Minnesota resident-and-worker of Minnesota's substantive protection for controversies arising here, so a foreign governing-law clause cannot quietly revive a banned covenant. A.4

This definition anchors the part of the agreement Minnesota left fully intact: the statute expressly keeps nondisclosure agreements and trade-secret protections outside its definition of a covenant not to compete. A precise, business-specific definition is what makes that safe harbor worth having — a definition so broad it swallows everything the worker knows starts to read like a restraint on working at all. B.1

Keep Trade Secrets defined separately from ordinary Confidential Information. The separate term is what lets trade-secret obligations run as long as secrecy lasts while everything else gets a finite term — and in a state where confidentiality tools carry the protective load a non-compete used to carry, that two-track structure is doing real work. B.1

One umbrella defined term keeps every covenant clock auditable. In Minnesota the Restricted Period now belongs to the surviving covenants — the non-solicits and any non-dealing clause — since a post-ban non-compete has no lawful period to run. Confirm each surviving covenant points at the defined term rather than carrying its own loose duration language.

Geographic scope only matters in two Minnesota settings now: agreements signed before the July 2023 ban, and sale-of-business or dissolution covenants, where the statute itself demands a reasonable geographic area without defining one. In a post-ban employment agreement, a Restricted Territory definition with nothing lawful to govern is a tell that a banned covenant is still in the document. B.2

Bound the class to customers the worker actually dealt with during a stated look-back window. Minnesota permits customer non-solicits, but commentary is blunt that a clause functioning like a non-compete gets banned whatever its label — and an all-customers definition is the first step toward exactly that reclassification. B.3

Keep the no-poach class to colleagues the departing worker actually worked with or supervised during the look-back window. A workforce-wide definition adds nothing protective and pushes a lawful non-solicit toward the functional-non-compete line the statute polices by effect rather than by label.

Name the interests the covenants protect. For a pre-2023 agreement this is load-bearing — the legacy case law enforces a covenant only when it serves a legitimate employer interest and goes no further than necessary. For a post-ban agreement, the recital should justify the surviving non-solicits and confidentiality terms as relationship and information protection, not as a substitute restraint on competition. B.4

In a post-July 2023 employment agreement this definition should have almost nothing to do, because the covenant it normally feeds is void. If a Competitive Business definition appears and operative language still hangs off it, trace where it leads — it usually marks a non-compete that survived a template update in name only. For pre-ban agreements and transaction covenants, check that the definition describes genuinely competing activity in concrete terms.

Where any ownership or investment restriction appears, look for the passive-holdings carve-out below a stated percentage. A clause that technically forbids holding index funds or ordinary public shares restricts the worker far beyond any information or relationship interest — and breadth without function is precisely what draws a Minnesota clause toward treatment as a banned restraint.

A drafting convenience rather than a requirement — many agreements inline the carve-out instead of defining a capitalized term. If the term appears, confirm its percentage threshold matches the operative carve-out language it supports.

Pin the term to initiating contact. A solicitation definition that also captures passively receiving an inquiry, or serving anyone who follows the worker unprompted, widens a permitted non-solicit toward a clause that blocks the worker from doing the job anywhere — the functional line Minnesota commentary warns will get the provision treated as a banned non-compete. B.3

Verify the trigger treats resignation, dismissal, and the end of a fixed term consistently. The clocks that still run in Minnesota — non-solicit periods, confidentiality terms with finite tails — all start at this event, and an ambiguous trigger turns every one of them into an argument.

A timing acknowledgement earns its place twice in Minnesota. For any agreement, it nails down the date that decides which legal regime applies. For pre-July 2023 covenants specifically, it should also state what consideration moved: the legacy case law refuses to count continued employment alone as consideration for a covenant signed after the job began, so a midstream covenant needs the bargained-for extra named in the document. C.1

No Minnesota statute requires it, but the acknowledgement is cheap procedural-fairness evidence — particularly useful where the agreement leans on the surviving covenants to do significant protective work and the employer may one day need to show the worker signed with eyes open.

Trade-secret obligations should run for as long as the information stays secret — that is how federal law frames the right, and a fixed expiry quietly forfeits it. In Minnesota the point is sharpened by the ban: with the non-compete gone, the trade-secret and confidentiality architecture is the employer's primary protection, and it should not be the clause carrying a self-imposed sunset. D.1

Give non-trade-secret confidential information its own finite term. A perpetual lid on ordinary business information invites a court to read the clause as overreaching — and an overreaching confidentiality clause is the kind of provision that gets examined for whether it functions as a restraint on working rather than a protection of information.

Federal law applies in Minnesota exactly as everywhere else: omit the whistleblower-immunity notice and the employer forfeits exemplary damages and attorney fees in a later trade-secret action against the worker. Because trade-secret enforcement is now the sharp end of a Minnesota employer's toolkit, this notice matters more here, not less. E.1

Confidentiality and non-disparagement language must leave wages, hours, and working conditions discussable. Federal labor law protects that speech in every state, and the Board has been striking overbroad clauses in employee agreements — a Minnesota agreement that survived the non-compete review can still fail here. E.2E.3

Confirm the carve-out for disclosure required by law, court order, or a government investigation, with notice to the employer where lawful. No confidentiality clause can override compelled process, and the express carve-out keeps the worker from being contractually squeezed between a subpoena and the agreement.

Return-or-delete at separation, certified in writing. In a state where the employer cannot keep the worker out of the market, control over what leaves with the worker is the protection that remains — and a signed certification is the cleanest contemporaneous evidence if confidential material later surfaces at the new employer.

Optional and lawful: Minnesota's statute keeps nonsolicitation agreements outside its definition of a banned covenant. The drafting discipline still matters — keep the clause to Covered Employees the worker actually worked with, inside the defined Restricted Period, and crafted to protect the team rather than to fence the worker out of the labor market. G.1G.2

Also expressly preserved — the statute excludes customer-solicitation and client-list restrictions from the ban by name. The trap is functional: a clause that nominally restricts solicitation but practically stops the worker from performing work for another employer gets treated as the banned covenant it imitates. Test what the clause does, not what its heading says. G.1G.3

Treat this one as the highest-risk member of the surviving suite. Forbidding the worker to do any business with covered customers — even when the customer initiates — restrains the work itself rather than the solicitation, which is exactly the function-over-label territory where Minnesota commentary says the ban reaches a renamed clause. If the business need is relationship protection, a true non-solicit usually covers it with far less reclassification risk. G.3

For an agreement entered into on or after July 1, 2023, a covenant not to compete should simply not be in the document: the statute makes it void and unenforceable, with no salary threshold, no notice cure, and no reasonableness rescue. Finding the clause is the finding — the remedy is removal, not a shorter term or a smaller territory. Only a genuine sale-of-business or dissolution covenant escapes, and a pre-ban agreement routes instead to the legacy common-law items in the Minnesota gates section below. G.4G.5

Rare, and in Minnesota worth a hard look rather than a wave-through: a restriction on investing in competing businesses is not among the categories the statute expressly preserves, so its safety depends on staying far from anything that functions as a restraint on the worker's next job. Confirm the passive-holdings carve-out is intact and the clause shares the defined Restricted Period.

Standard to include with a stated duration, and untouched by Minnesota's non-compete statute — but audit the carve-outs with the same care as the confidentiality clause: truthful testimony, statements to government agencies, and protected workplace speech must sit outside the restriction, because federal labor law polices overbroad versions in every state. H.1

The worker's representation that no earlier agreement blocks the new role. It cuts the other way on intake in Minnesota: an inbound candidate may be carrying a covenant from elsewhere that the new agreement's representation forces into the open — and whether that covenant means anything against a worker now based in Minnesota is a question worth asking before the start date, not after.

A genuine drafting choice, and one to scope carefully here: a letter warning a new employer off a worker based on a covenant the statute voids accomplishes nothing protective and manufactures interference exposure. If the clause appears, confine any disclosure to the covenants that actually survive Minnesota law — the non-solicits and confidentiality terms.

The agreement should say whether a covenant clock pauses while the worker is in breach — but in Minnesota the question only exists for clauses with a lawful clock: the non-solicits, pre-ban covenants, and transaction covenants. A void post-ban non-compete has no period to extend, and a tolling mechanism attached to one is dead weight. Where tolling does attach to a surviving covenant, treat it as a negotiated term to verify, not a settled entitlement.

Look for the acknowledgement that breach may cause irreparable harm and that injunctive relief is appropriate. In Minnesota its practical reach is the surviving suite — an injunction enforcing a non-solicit or confidentiality clause remains fully available, while no recital can put a court behind a covenant the statute has already voided.

A commercial choice; absent a clause, each side bears its own fees. Check that any fee-shifting is mutual and prevailing-party based — a one-way employer clause layered over covenants of doubtful validity reads as leverage rather than protection, and does nothing to make a void covenant enforceable.

Read any savings or reformation language with the statute in mind: a covenant the ban voids cannot be narrowed, blue-penciled, or reformed into validity, because the defect is the covenant's existence rather than its breadth. For post-July 2023 agreements the correct drafting response is removal, not revision — so treat a reformation clause wrapped around a non-compete as a sign the form predates the ban. An ordinary severability clause remains sensible housekeeping for the lawful covenant suite. M.1

Per-covenant survival keeps each obligation's tail independently visible: perpetual for trade secrets, finite for ordinary confidentiality, the Restricted Period for the non-solicits. In a Minnesota agreement the survival clause is also where a removed non-compete sometimes lingers by reference — confirm nothing survives that the body of the agreement no longer lawfully contains.

Confirm employer-side assignability to successors and that the worker cannot assign. Assignment moves the surviving covenants to a buyer; it does not upgrade them — a void covenant stays void in the assignee's hands, and the buyer's diligence team should be reading this checklist the same way.

For an employee who primarily resides and works in Minnesota, the agreement cannot, as a condition of employment, send section 181.988 disputes out of state or impose a choice-of-law term that strips Minnesota's substantive protection for controversies arising here. A violating clause is voidable at the employee's request, after which the dispute is heard in Minnesota under Minnesota law — so an out-of-state governing-law clause buys nothing and flags a form that was never localized. The clause should still state law, venue, and process; for a Minnesota-based employee, Minnesota law with a Minnesota forum is the only combination that works as written. P.1P.2P.3

Standard boilerplate, with one Minnesota-specific reading: an amendment signed on or after July 1, 2023 is a new agreement for the covenant it carries, so re-papering an old form during a promotion or retention cycle can pull a once-lawful covenant into the ban's reach. Commentary has urged template review even at employers that never used non-competes, because the choice-of-law limits alone require updates. Q.1

Run this gate before reviewing any covenant on its merits: was the agreement entered into before, or on or after, July 1, 2023? On or after, a covered non-compete is void and unenforceable unless a transaction exception applies; before, the statute does not reach it and the legacy common-law items below take over. Every other Minnesota conclusion on this page hangs on that one classification, which is why an undated agreement fails review at the threshold. R.1R.2

A post-ban non-compete survives only as a genuine transaction restraint: agreed during the sale of a business by the seller, partners, members, or shareholders and the buyer, or agreed in anticipation of a dissolution — and even then only as a temporary covenant limited to a reasonable geographic area and length of time. The statute never defines reasonable, so the exception is not a blank check; and an ordinary employee non-compete relocated into a purchase agreement or operating document does not become a seller covenant by changing addresses. R.3R.4R.5

Apply the ban to independent contractors exactly as to employees: the statute defines an employee as any individual performing services for an employer, independent contractors included, with no income floor anywhere in the section. Converting the worker to a 1099 relationship or routing the restraint through a consulting agreement changes the paperwork, not the analysis — a non-compete in the consulting agreement is just as void. R.6R.7

Walk each surviving covenant past one question: does it, in operation, stop the worker from working for a competitor? The statute preserves NDAs, trade-secret protections, non-solicits, and client-list restrictions by category, but the category is defined by what the clause does — a non-solicit drafted to cover every customer in the market, or a confidentiality clause covering everything the worker could possibly use elsewhere, performs the banned function under a permitted name. Draft and review these clauses as protection for relationships and information, never as a substitute restraint. R.8R.9

For a covenant signed before July 1, 2023 but after the job began, demand evidence of independent consideration — a raise, a bonus, a promotion, something identifiable beyond keeping the job. Minnesota's appellate courts hold that continued employment alone is not sufficient consideration for a covenant that was not part of the original employment deal, and a legacy covenant that fails this gate never reaches the reasonableness analysis at all. R.10

A pre-ban covenant that clears the consideration gate still has to earn enforcement the old way: it must serve a legitimate employer interest and reach no further than necessary to protect it, weighed fact by fact — the nature of the business, the character of the employment, and all the circumstances, balanced against the worker's right to earn a living. Minnesota courts disfavored employment non-competes long before the ban, so do not read the statute's prospective reach as a presumption that older covenants hold up. R.11R.12

If the agreement sits in a staffing, consulting, or vendor relationship, check the business-to-business layer too: since July 1, 2024 a service provider may not restrict a customer from soliciting or hiring the provider's workers, a violating provision is void even in a contract that predates the rule, and the provider owes affected employees notice of the violating covenant. The narrow statutory exemption covers professional software-development consulting arrangements — outside it, strike the no-hire clause. R.13R.14R.15