Non-compete agreements typically arise at the start of employment or when an employee is separated from employment. Non-compete agreements are disfavored by courts in Minnesota but will be enforced if they serve a legitimate interest and are no more restrictive than necessary. Non-compete agreements must be supported by consideration and typically be entered before the start of employment. The restrictions in terms of duration and geographical scope must be reasonable. These factors can vary depending on the industry involved and facts of each case.
In determining whether to enforce a particular non-compete agreement or provision, the court balances the employer's interest in protection from unfair competition against the employee's right to earn a livelihood. Other factors may be assessed, and the court sometimes can use the “blue pencil” doctrine that allows the court to modify or remove unreasonable terms to allow the agreement to be enforceable.
Non-compete agreements raise complicated legal issues that should be reviewed with counsel when disputes arise.
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