Changes to non-compete ban now effective
By Sananda McCall
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Minnesota (KIMT) — In the summer of 2023, Minnesota became the first state to enforce a widespread ban of non-compete agreements between employers and employees.
However, in March 2024, one of the bill’s writers saw a loophole that permitted “shadow” non-compete agreements to remain legal. This ensures businesses cannot make agreements with one another to restrict a person’s employment. As of July 1 that becomes law.
In Minnesota, it was a first of its kind. In the last five years other states had talked about prohibiting non-compete agreements based on worker wages.
However, in favor of job mobility, easing worker uncertainty, and strengthening the workforce–the North Star state is saying so long to that contract clause.
Lisa Ross is the owner of Elevate Marketing Solutions. Businesses such as hers in creative design spaces, as well as health care, sales, and tech are where a majority of the non compete causes were found.
” Non Compete is more about protecting the company from people duplicating or replicating some of the things that they’re doing that maybe someone else isn’t.”
Ross says her views are neutral on the ban.
“Non compete can protect the business but yet it also has many drawbacks for the employee,” she said. ”If they invest in their employees they way they should. I don’t think the non compete should be a huge problem.”
Many companies are now turning to non-disclosure agreements to protect confidential information.
The new Minnesota Non-Compete law only applies to post-termination non-compete agreements that were entered into on or after July 1, 2023
The Federal Trade Commission (FTC) ruled that an official ban of non compete clauses will become effective September 4.
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