North Dakota Noncompete Agreement: What's Included and Enforceability

Quick Facts — Noncompete Agreement Lawyers

Is a Non-Compete Agreement Enforceable in North Dakota?

No. North Dakota is one of the few states in the United States that prohibits the use of non-compete agreements for employee purposes. Under North Dakota law, contracts that restrain anyone from exercising a lawful profession, trade, or business are void. The only exception to this rule is when a person sells the goodwill of a business.

North Dakota law does allow for non-compete agreements to be used by a person buying a business to restrict the seller from carrying on a similar business after the sale is completed. In addition, non-compete agreements can also be used by shareholders and partners when dissolving a business entity.

How Long Does a North Dakota Non-Compete Agreement Last?

The North Dakota Supreme Court has ruled that 10 years or less is a reasonable duration for non-compete agreements when selling a business. The courts will look at all the facts and circumstances of a case when determining if a contract duration is reasonable and could possibly strike down agreements with terms less than 10 years.

How Do Business Owners Protect Trade Secrets in North Dakota?

Although North Dakota does not allow non-compete agreements, they do allow employers to protect confidential business information like trade secrets. These are a few ways business owners can protect their interests:

  1. Implement an employment contract or employee handbook that clearly states all information and work product are owned by the company.
  2. Protect work product and information by ensuring it is protected as a trade secret under North Dakota trade secrets law.
  3. Have employees sign non-disclosure agreements which as of now, are still legal.

What Voids a Non-Compete Agreement in North Dakota?

Like any contract, North Dakota non-compete agreements must adhere to all of the laws governing contracts in the state. Every contract must include an offer, acceptance and consideration. In addition, the contract must be entered into voluntarily free from coercion or fraud.

Frequently Asked Questions

How do I hire a lawyer to draft a noncompete agreement in North Dakota?

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Morgan N. on ContractsCounsel
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Morgan N.

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Morgan is a real estate attorney with six years of experience in residential, land, and commercial real estate transactions. He has experience assisting municipalities, businesses, buyers and sellers in real estate related matters. He has worked on various projects including purchase agreements, contract for deed, easements, mortgages, access agreements, contract/lease review and also title review. Prior to entering private practice, Morgan was a Realtor and assisted buyers and sellers in residential sales and closing services. Morgan provides proactive, responsive and dependable work to each client and project.

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Employee contract, such as non compete/non solicit, could having this contract ever result in criminal/jail time?

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