HF 3456

as introduced - 93rd Legislature (2023 - 2024) Posted on 02/19/2024 03:44pm

A bill for an act
relating to labor; prohibiting restrictive employment covenants in certain service
contracts; proposing coding for new law in Minnesota Statutes, chapter 181.

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA:

Section 1.

[181.9881] RESTRICTIVE EMPLOYMENT COVENANTS; VOID IN
SERVICE CONTRACTS.

Subdivision 1.

Definitions.

(a) "Customer" means an individual, partnership, association,
corporation, business, trust, or group of persons hiring a service provider for services.

(b) "Employee," as used in this section, means any individual who performs services
for a service provider, including independent contractors. "Independent contractor" has the
meaning given in section 181.988, subdivision 1, paragraph (d).

(c) "Service provider" means any partnership, association, corporation, business, trust,
or group of persons acting directly or indirectly as an employer or manager for work
contracted or requested by a customer.

Subd. 2.

Restrictive employment covenants; void and unenforceable.

(a) No service
provider may restrict, restrain, or prohibit in any way a customer from directly or indirectly
soliciting or hiring an employee of a service provider.

(b) Any provision of an existing contract that violates paragraph (a) is void and
unenforceable. When a provision in an existing contract violates this section, the service
provider must provide notice to their employees of this law.

Subd. 3.

Service provider agreement amendment.

Notwithstanding any law to the
contrary, no later than one year from the effective date of this section, service providers
shall:

(1) amend existing agreements to remove any restrictive employment provision that
violates subdivision 2; or

(2) sign a memorandum of understanding with each customer that provides that any
contract provisions that violate subdivision 2 in any way are void and unenforceable, and
provides notice to their employees and the customer of their rights and obligations under
this section.

EFFECTIVE DATE.

This section is effective July 1, 2024.