You have probably read the editorials about how the efforts of employers to monopolize employees’ time during and outside of work hours and to control many aspects of their lives not directly related to their jobs is a major driver of worker burnout. This burnout has led many employees to quit their jobs, provided that they had another job lined up or could afford to take a pay cut, but because of non-compete clauses in some employment contracts, leaving your current job does not always solve the problem. That is right; sometimes it is possible for your employer to control you, including limiting your opportunities for subsequent employment, for a year or more after you stop working for them. If you think that is unfair, most judges agree. Minnesota law allows non-compete clauses in employment contracts, but only if they are fair to both parties and if it would be unfair not to include them. You should think through the situation carefully if your employer wants you to sign a non-compete agreement before or after starting a new job. Before you sign a non-compete agreement or an agreement that includes a non-compete clause, you should consult the Minnesota non-compete agreement lawyers at HKM Employment Attorneys LLP.
What is a Non-Compete Agreement?
Employment agreements contain many details about the rights and obligations of the employer and the employee. The more detailed the agreement is, the better; it is much easier to spend several days reading the fine print of your employment contract with your lawyer than it is to leave things ambiguous in your contract so that your employer can take up more and more of your time and energy and give you nothing in return. An airtight employment contract should include, at minimum, the following details:
- The employee’s job duties
- The rate of pay and the payment schedule
- When the period of employment will begin
- When the contract period will end, whether it is renewable, and the procedures for renewal
- Health insurance, retirement funds, and other benefits associated with the job
- Which company-issued equipment, if any, the employee must return at the end of the period of employment
- How the parties will resolve disputes related to the contract (the best way to do this is to say that the courts of Minnesota have jurisdiction to resolve any such disputes)
- Which party will possess intellectual property produced by the employee during the employee’s employment with the company
It is because of this last aspect of employment contracts that some employers choose to include non-compete clauses.
What is the Rationale Behind Including a Non-Compete Clause in an Employment Contract?
In a market economy that thrives on competition, businesses and individuals have the right to keep confidential, within reason, the unique ideas that help them succeed. Depending on the nature of the idea, intellectual property laws provide for a variety of legal protections, including copyrights, patents, and trademarks. If your job includes the creation of products and ideas eligible for copyrights or patents, then your employment contract will include clauses about the ownership of this intellectual property. Often, though, in the course of an employee’s work, the employee gains experience and knowledge that, while not eligible for trademarks, patents, and copyrights, would make the employee a strong competitor to the employer if the employee were to strike out on their own and open a rival business.
Non-compete clauses set limits on the employee’s ability to do this. A non-compete clause typically goes like this: “For a period of [period of time, usually one or two years] after their last day of work with the company, [employee’s name] may not open a new company in the field of [specific professional field of employer’s business, for example, sewing machine repair] with a [number] miles radius of Minneapolis.” There is a lot of room for debate over the point at which a non-compete clause stops being fair and starts being unfairly restrictive. In general, the fairest non-compete clauses have the shortest time limits, and the smallest geographic areas, and the most specific jobs where the employer cannot work while the non-compete clause is effective. Your employer does not have the right to make you unemployable. If you are a pediatrician licensed to practice in Minnesota, your employer cannot bar you from practicing medicine in Minnesota for the next 10 years, effectively requiring you to move out of state.
Will the Court Enforce a Non-Compete Clause in an Employment Contract?
Minnesota does not have its own state law specific to non-compete clauses in employment contracts. It follows the federal guidelines, which are not very specific. Minnesota case law shows that the courts do not look favorably on overly restrictive non-compete clauses; more than half of the lawsuits over non-compete agreements that have gone to trial in Minnesota have resulted in rulings in favor of the employee.
The best way to avoid a situation in which you cannot work in your professional field without moving out of Minneapolis is not to sign an employment contract that includes a non-compete agreement unless you are sure that it will not restrict your career opportunities in the long term. The Minneapolis non-compete agreement lawyers at HKM Employment Attorneys LLP can help you decide whether the non-compete agreement that your employer wants you to sign is reasonable and can suggest amendments to it if it is not.
The laws about non-disclosure agreements are similar to the rules governing non-compete clauses. Your employer can only require you to keep work-related information secret after you stop working for the company if the company would be harmed by you disclosing the information and if keeping the information confidential would not create an unfair burden on you or severely limit your job prospects.
Contact a Minneapolis Non-Compete Agreement Lawyer
Your employer does not have the right to shut you out of your career field after your employment relationship with your employer ends. Contact the Minneapolis non-compete agreement lawyers at HKM Employment Attorneys LLP to set up a consultation.