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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5 Yrs Experience
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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 Rights

Noncompete Agreement

Georgia

Asked on Jul 4, 2023

How does a noncompete agreement work?

I am an employee at a small business and I have recently been asked to sign a noncompete agreement. I am not sure how these agreements work and what rights I have as an employee. I am also concerned about the restrictions that could be placed on me if I sign the agreement. I want to make sure I understand the implications of signing the agreement before I do so.

Nancy B.

Answered Aug 4, 2023

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

Read 1 attorney answer>

Employment

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Asked on Apr 15, 2021

Can I work for a competitor with my current noncompete?

I have ended my non competent consulting agreement with my current employee and I have an offer to work as an employer “not as consultant” with a competitor company to my privious employees so can I work as an employee without any problem? The consultant agreement says the following: Under any circumstances the consultant shall not engage directly or indirectly either as a principal agent , consultant,stock holder , partner or in any other capacity whatsoever have any other relationship with any business which compete with the company in USA.

Jane C.

Answered Apr 16, 2021

I suggest that you have an attorney review the entire agreement. It is hard to comment reading a paragraph taken out of context. From the limited facts you present, it seems that you cannot accept this job offer without violating the terms of the non-compete. Disclaimer - This information is provided for general informational purposes only. No information contained in this post should be construed as legal advice and does not establish an attorney-client relationship.

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Employment

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Colorado

Asked on Mar 31, 2021

Can I get out of my noncompete agreement?

I am looking at my options.

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Answered Mar 31, 2021

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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Asked on Jun 3, 2023

Noncompete agreement and promotions?

I recently accepted a promotion within my company and was asked to sign a noncompete agreement. I am concerned that if I accept the promotion and then leave the company, that I will not be able to take a similar position with another company. I am also worried that if I don't accept the promotion, I may be at risk of being terminated. I need to know what my rights are and what the implications are of signing the noncompete agreement.

Thomas L.

Answered Jun 16, 2023

It depends on the terms of the non-compete and the size of your employer. Without seeing the agreement and knowing the size of your employer, I can't offer more advice.

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Asked on Jul 30, 2023

Noncompete agreement and severance packages?

I recently left my job of 5 years, where I had signed a non-compete agreement. I am now negotiating a severance package with my former employer and am unsure of what my rights and obligations are regarding the non-compete agreement. I am seeking clarification on how the non-compete agreement should be handled in relation to the terms of my severance package.

Diane D.

Answered Sep 1, 2023

To be able to answer this question, I would need to see the agreements. No one can answer your question without seeing the agreements.

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