1st Engrossment - 93rd Legislature (2023 - 2024) Posted on 03/16/2023 10:11am
A bill for an act
relating to employment; providing that covenants not to compete are void and
unenforceable; providing for the protection of substantive provisions of Minnesota
law to apply to matters arising in Minnesota; proposing coding for new law in
Minnesota Statutes, chapter 181.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA:
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(a) "Covenant not to compete" means an agreement between
an employee and employer that restricts the employee, after termination of the employment,
from performing:
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(1) work for another employer for a specified period of time;
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(2) work in a specified geographical area; or
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(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.
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(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.
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(a) Any covenant not to
compete contained in a contract or agreement is void and unenforceable.
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(b) 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.
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(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.
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(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:
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(1) require the employee to adjudicate outside of Minnesota a claim arising in Minnesota;
or
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(2) deprive the employee of the substantive protection of Minnesota law with respect to
a controversy arising in Minnesota.
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(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.
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(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.
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(d) For purposes of this section, adjudication includes litigation and arbitration.
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If any provision of this section is found to be unconstitutional
and void, the remaining provisions of this section are valid.
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This section is effective the day following final enactment and
applies to contracts and agreements entered into on or after that date.
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