Q. Is it possible for an employer in Minnesota to enter into an enforceable noncompete agreement with an existing employee?
A. Yes. In order for a noncompete agreement to be enforceable in Minnesota, an employer must provide the employee with something of value in return for the employee’s commitment not to compete. When the noncompete is made a condition of the initial offer of employment, the employment relationship itself is sufficient consideration to support the noncompete.
Minnesota courts have held that continued employment may not be sufficient in and of itself to support enforcement of a noncompete. So called “afterthought noncompetes” (those entered into after the employment relationship has already commenced) should be accompanied by some benefit that the employee will not otherwise receive unless he or she signs the noncompete. Those additional benefits might include a signing bonus, a promotion, a raise or anything else of meaningful value.
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