Minn. Stat. » CHAPTER 181. EMPLOYMENT
Minnesota Statutes

Minn. Stat. § 181.988 (2026)

Covenants Not To Compete Void In Employment Agreements; Substantive Protections Of Minnesota Law Apply

✓ text as last checked Sept. 2026 (this copy records no edition or section history)
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Subdivision 1.Definitions.

(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.

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.

(b) "Employer" means any individual, partnership, association, corporation, business, trust, or any person or group of persons acting directly or indirectly in the interest of an employer in relation to an employee.

(c) "Employee" as used in this section means any individual who performs services for an employer, including independent contractors.

(d) "Independent contractor" means any individual whose employment is governed by a contract and whose compensation is not reported to the Internal Revenue Service on a W-2 form. For purposes of this section, independent contractor also includes any corporation, limited liability corporation, partnership, or other corporate entity when an employer requires an individual to form such an organization for purposes of entering into a contract for services as a condition of receiving compensation under an independent contractor agreement.

Subd. 2.Covenants not to compete void and unenforceable.

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

(b) Notwithstanding paragraph (a), a covenant not to compete is valid and enforceable if:

(1) the covenant not to compete is agreed upon during the sale of a business. The person selling the business and the partners, members, or shareholders, and the buyer of the business may agree on a temporary and geographically restricted covenant not to compete that will prohibit the seller of the business from carrying on a similar business within a reasonable geographic area and for a reasonable length of time; or

(2) the covenant not to compete is agreed upon in anticipation of the dissolution of a business. The partners, members, or shareholders, upon or in anticipation of a dissolution of a partnership, limited liability company, or corporation may agree that all or any number of the parties will not carry on a similar business within a reasonable geographic area where the business has been transacted.

(c) 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.

(d) 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.

Subd. 3.Choice of law; venue.

(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.

(b) Any provision of a contract or agreement that violates paragraph (a) is voidable at any time by the employee and if a provision is rendered void at the request of the employee, the matter shall be adjudicated in Minnesota and Minnesota law shall govern the dispute.

(c) 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.

(d) For purposes of this section, adjudication includes litigation and arbitration.

(e) This subdivision applies only to claims arising under this section.

Notes of Decisions
Cited in 10 cases (10 in the last 5 years), 2023–2025 · leading case: Starkey Labs., Inc. v. Saykeo, No. 0:25-cv-02737 (D. Minn. July 7, 2025).
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Starkey Labs., Inc. v. Saykeo, No. 0:25-cv-02737 (D. Minn. July 7, 2025). · cites it 6× “1, 2025) (noting Minn. Stat. § 181.988 is not retroactive).”
Walburg v. Biotronik, Inc., No. 0:25-cv-01594 (D. Minn. Oct. 7, 2025). · cites it 6× “) Walberg states that although Minn. Stat. § 181.988 , subdivision 3 appears to void such provisions only in the context of certain claims, “the prohibitory language sweeps much more broadly.”
Nelson v. SIS Software, LLC, No. 0:24-cv-04180 (D. Minn. Sept. 26, 2025). · cites it 5× “Laws 1214 , 1266; Minn. Stat. § 181.988 subdiv. 2. The noncompete statute further provides that forum-selection and choice-of-law clauses are voidable by an employee who primarily resides and works in Minnesota.”
C.H. Robinson Worldwide, Inc. v. Traffic Tech, Inc., No. 0:19-cv-00902 (D. Minn. Sept. 27, 2024). · cites it 4× “Minn. Stat. § 181.988 , subd. 2. The statute further includes an anti-waiver provision, also like that of California, banning the use of choice-of-law provisions to apply the law of another state to a Minnesota employment relationship.”
U.S. Bank Nat'l Ass'n v. Kirk, No. 0:25-cv-01926 (D. Minn. June 6, 2025). · cites it 4× “31, 2011), Minnesota law permits use of nonsolicitation agreements to protect an employer’s goodwill, see Minn. Stat. § 181.988 , subd. 1(a).8 This factor therefore weighs 8 In 2023, the Minnesota Legislature largely banned the use of covenants not to compete in employment…”
Cookie Dough Bliss Franchising, LLC v. Feed Your Soul Minnesota, LLC, No. 0:23-cv-01552 (D. Minn. Aug. 1, 2023). · cites it 2× “6, § 38 (to be codified at Minn. Stat. § 181.988 (2023)). cited authority supports geographic zones of ten miles or less, with an outlier of a 20-mile radius.”
Perficient, Inc. v. Craft, No. 0:24-cv-02425 (D. Minn. July 10, 2024). · cites it 2× “Craft argues that the 2024 Stock Award is unenforceable, because it was entered into after Minn. Stat. § 181.988 took effect on July 1, 2023, preventing employees who primarily live and work in Minnesota from adjudicating disputes related to employment disputes for claims…”
Perficient, Inc. v. Craft, No. 0:24-cv-02425 (D. Minn. July 10, 2024). · cites it 2× “Craft argues that the 2024 Stock Award is unenforceable, because it was entered into after Minn. Stat. § 181.988 took effect on July 1, 2023, preventing employees who primarily live and work in Minnesota from adjudicating disputes related to employment disputes for claims…”
Nelson v. SIS Software, LLC, No. 1:25-cv-05643 (N.D. Ga. Sept. 26, 2025). · cites it 2× “Laws 1214 , 1266; Minn. Stat. § 181.988 subdiv. 2. The noncompete statute further provides that forum-selection and choice-of-law clauses are voidable by an employee who primarily resides and works in Minnesota.”
Walburg, No. 3:25-cv-01983 (D. Or. Oct. 7, 2025). · cites it 2× “) Walberg states that although Minn. Stat. § 181.988 , subdivision 3 appears to void such provisions only in the context of certain claims, “the prohibitory language sweeps much more broadly.”
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