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

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Morgan N. on ContractsCounsel
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Morgan N.

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5 Yrs Experience
Licensed in ND MN
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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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Asked on Dec 12, 2023

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

If someone accuses you of fraud, because they believe you never had intended to honor your employment contract such as non-compete/non-solicit. Could this ever become a criminal case, resulting in criminal/jail time?

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No, at worst, it is a breach of a contract which is a civil matter to be handled in civil court.

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You may be able to be released from a non compete. You would have to review the language in the non compete to see the expiration. DISCLAIMER The answers to these questions do not constitute legal advice and does not create an attorney-client relationship with the attorney and anyone who reviews these responses.

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In its simplest terms, a noncompete agreement in an employment context is an agreement that says you will not compete with your former employer if you ever stop working for them. It typically forbids things like: + Working for a competitor + Starting a company that sells the same services/products as your employer + Recruiting employees from your current employer after you have left that employment. One thought is that this could be requested shortly before letting an employee go just to protect the company from competition but I hope that is not the case here as it seems like an unfair use of the noncompete agreement ability in Georgia. The issues are usually the geographical scope (for example within 15 miles of Dalton, Georgia), the time period (one or two years is usually sufficient and courts do not favor long noncompete agreements), and the consideration (such as a new job - which is not applicable in your case, or more compensation). Regards, Nancy A. Burnett

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No, this at worst is a civil matter and not a criminal matter. F

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