An employee’s last day is not the end of the legal relationship. For Minnesota employers, what happens after an employee departs—what they take with them, who they contact, and what systems they access—can matter as much as the termination itself.
Minnesota’s legal landscape for post-employment restrictions has changed significantly in recent years. The 2023 non-compete ban reshaped what employers can enforce, and the shift toward remote work has made issues like email access and data portability more pressing than ever.
Here is what Minnesota employers need to understand about the restrictions and protections available after an employee leaves.
The Minnesota Non-Compete Ban: What Changed
Effective July 1, 2023, Minnesota banned most post-employment non-compete agreements (Minn. Stat. § 181.988). The law voids any covenant not to compete entered into on or after that date, with narrow exceptions.
What the Ban Covers
A “covenant not to compete” is defined broadly as an agreement that restricts an employee or independent contractor from performing work for another employer for a specified period of time, in a specified geographic area, or in a capacity similar to their work for the current employer.
The ban applies regardless of the employee’s income level, job title, or access to sensitive information. Executives, salespeople, and entry-level employees are treated the same.
What the Ban Does Not Cover
The statute explicitly excludes these types of agreements from the definition of “covenant not to compete”:
- Nondisclosure agreements — Agreements protecting trade secrets and confidential information
- Non-solicitation agreements — Agreements restricting the ability to solicit the employer’s clients, customers, or employees
- Agreements not to use client or contact lists — Restrictions on using the employer’s customer relationships
- Non-compete agreements related to the sale or dissolution of a business — If the employee is selling their ownership interest or the business is dissolving, a non-compete can still be part of the transaction
Pre-Ban Non-Competes
Non-compete agreements signed before July 1, 2023 are not automatically voided by the new law. They remain potentially enforceable under the standards that existed when they were signed. Minnesota courts traditionally evaluated pre-ban non-competes under a reasonableness test, examining:
- Whether the restriction protects a legitimate business interest
- Whether the duration and geographic scope are reasonable
- Whether the restriction imposes undue hardship on the employee
- Whether the restriction is broader than necessary
If you have pre-ban non-competes with current or recently departed employees, they may still be enforceable—but the analysis is fact-specific.
Non-Solicitation Agreements: What Employers Can Still Enforce
With non-competes off the table for new agreements, non-solicitation agreements have become the primary contractual tool for protecting client relationships and workforce stability after an employee departs.
Types of Non-Solicitation Restrictions
Client/customer non-solicitation. Prevents the departing employee from soliciting or doing business with the employer’s clients or customers for a specified period. This is the most common and most enforceable form.
Employee non-solicitation. Prevents the departing employee from recruiting or soliciting the employer’s other employees. This protects against a departing manager or executive stripping the team on their way out.
Enforceability Standards in Minnesota
Minnesota courts enforce non-solicitation agreements, but scrutinize them as restraints on trade. To be enforceable, the restriction must:
- Protect a legitimate business interest — Client relationships, customer goodwill, and workforce stability all qualify.
- Be reasonable in scope — Restrictions limited to clients the employee actually worked with, or employees in the same department, are more defensible than blanket prohibitions.
- Be reasonable in duration — Courts have upheld restrictions of 12-24 months. Restrictions beyond 24 months are harder to defend.
- Be supported by adequate consideration — For existing employees, continued employment may constitute adequate consideration, but additional consideration (such as a bonus, promotion, or severance payment) strengthens the agreement.
What Constitutes “Solicitation”
This is an area where the details matter. A federal court in Minnesota has ruled that:
- A mere announcement of a new position (e.g., a LinkedIn update) does not constitute solicitation.
- An announcement that includes express solicitation of business or directs contacts to the new employer’s services likely crosses the line.
- Including new contact information in a communication to former clients may be treated as solicitation depending on the context.
Practical guidance: If you are enforcing a non-solicitation agreement, focus on specific, documented instances of direct outreach to your clients or employees—not on general announcements or passive social media activity.
New Restriction: Service Provider Non-Solicitation Ban
Effective July 1, 2024, Minnesota expanded its restrictions beyond employment agreements. The state now prohibits non-solicitation provisions in agreements between service providers and their customers that would prevent customers from soliciting or hiring the service provider’s employees or independent contractors. This applies to staffing agreements, outsourcing contracts, and similar arrangements—not to direct employment relationships. There is an exception for certain computer professionals.
Trade Secrets: Protection That Does Not Require a Contract
Even without a non-compete or any written agreement, Minnesota employers have statutory protection for trade secrets under the Minnesota Uniform Trade Secrets Act (MUTSA), codified at Minn. Stat. § 325C.01 through § 325C.08.
What Qualifies as a Trade Secret
Under MUTSA, a trade secret is information that:
- Derives independent economic value from not being generally known to others who could benefit from it, and
- Is the subject of reasonable efforts to maintain its secrecy.
This is a broad definition. Trade secrets can include:
- Customer lists and pricing information
- Financial data and business plans
- Manufacturing processes and formulas
- Software code and algorithms
- Marketing strategies and competitive analyses
- Vendor relationships and contract terms
The critical element is reasonable efforts to maintain secrecy. If your company does not take concrete steps to protect information—passwords, access controls, confidentiality agreements, marked documents, need-to-know restrictions—it may not qualify for trade secret protection even if it is commercially valuable.
What Constitutes Misappropriation
Misappropriation includes:
- Acquisition of a trade secret by improper means (theft, bribery, misrepresentation, breach of a duty to maintain secrecy, espionage)
- Disclosure or use of a trade secret without consent by someone who used improper means to acquire it, or who knew or should have known it was acquired improperly
An employee who memorizes your client list, downloads pricing data, or copies proprietary processes before leaving—and then uses that information at a new employer—may be liable for trade secret misappropriation even without any written agreement.
Remedies for Misappropriation
MUTSA provides:
- Injunctive relief — A court order requiring the former employee (and their new employer) to stop using the trade secret.
- Damages — Including actual losses, unjust enrichment, and in cases of willful and malicious misappropriation, exemplary damages up to twice the compensatory amount.
- Attorney’s fees — Available if the misappropriation was willful and malicious, or if a claim was made in bad faith.
Strengthening Your Trade Secret Position
The best time to protect trade secrets is before an employee leaves. Steps that strengthen your position:
- Use written nondisclosure agreements with all employees who have access to sensitive information.
- Mark documents and files as “Confidential” or “Trade Secret.”
- Limit access to sensitive information on a need-to-know basis.
- Use technical controls: password protection, access logs, encryption, DRM.
- Conduct exit interviews that remind departing employees of their confidentiality obligations and recover any company materials.
- Document what the employee had access to before they leave. If you later need to prove misappropriation, you will need to show what information they could have taken.
Email and System Access: The Overlooked Risk
One of the most common post-employment disputes involves a former employee’s continued access to company email, cloud storage, or other digital systems. This issue has escalated with the shift toward cloud-based tools—Gmail, Microsoft 365, Slack, Dropbox, Google Drive—that can be accessed from personal devices without any special credentials.
Revoke Access Immediately
This is not negotiable. On the employee’s last day (or, for involuntary terminations, at the time of discharge), revoke access to:
- Company email accounts (including shared mailboxes and distribution lists)
- Cloud storage (Google Drive, SharePoint, OneDrive, Dropbox)
- CRM and client management systems (Salesforce, HubSpot, Clio)
- Accounting and financial systems (QuickBooks, Xero)
- Communication platforms (Slack, Teams, Zoom)
- VPN and remote desktop access
- Physical access (badge systems, alarm codes, keys)
The Computer Fraud and Abuse Act (CFAA)
The federal Computer Fraud and Abuse Act (18 U.S.C. § 1030) provides employers with a civil cause of action against anyone who accesses a “protected computer” without authorization or exceeds authorized access.
After the Supreme Court’s 2021 decision in Van Buren v. United States, the CFAA’s scope has narrowed:
- If a former employee accesses your systems after their authorization has been revoked, that access is “without authorization” and may violate the CFAA.
- If a current employee accesses systems they are authorized to use but misuses the information (e.g., downloading client data before resigning), that alone may not violate the CFAA after Van Buren—though it may still violate trade secret law, fiduciary duties, or contractual obligations.
The practical implication: Revoking access promptly is both a security measure and a legal prerequisite. If you never revoke a former employee’s credentials, your CFAA claim is significantly weaker because the access was arguably still “authorized.”
What About Personal Devices?
If the employee used personal devices to access company systems (BYOD policies), consider:
- Whether your BYOD policy includes a provision allowing remote wipe of company data from personal devices.
- Whether the employee downloaded or synced company files to personal cloud accounts.
- Whether the employee has auto-saved passwords that still grant access to company systems.
Address these issues in your IT offboarding process, not after a problem surfaces.
Forwarding and Auto-Replies
After revoking the employee’s direct access, set up:
- Email forwarding to the appropriate person for business continuity.
- An auto-reply notifying senders that the employee is no longer with the company and providing a new contact.
- Monitoring of the former employee’s email for a reasonable period to ensure no business communications are lost.
Do not delete the email account immediately. You may need the contents for business purposes, legal holds, or dispute resolution.
Putting It Together: An Enforcement Framework
When a key employee departs—particularly one with access to clients, trade secrets, or sensitive systems—take these steps:
Immediate (Day of Departure)
- Revoke all system and facility access
- Collect company devices, keys, and materials
- Remind the employee of post-employment obligations in writing
- Preserve the employee’s email account and digital workspace
First Week
- Send a formal letter outlining the employee’s continuing obligations (non-solicitation, nondisclosure, return of materials)
- Notify clients or customers of the transition, if appropriate
- Review what data and files the employee accessed in their final weeks (access logs, download history)
- If the employee is going to a competitor, assess whether proactive communication to the new employer about the employee’s obligations is appropriate
First Month
- Monitor for signs of solicitation (client departures, employee recruitment, social media activity)
- If you discover potential violations, consult an attorney immediately—delay weakens enforcement
- If warranted, send a cease-and-desist letter to the employee and/or their new employer
- Evaluate whether injunctive relief is necessary to prevent ongoing harm
Ongoing
- Document any evidence of misappropriation or solicitation
- Assess whether the situation warrants litigation or whether a negotiated resolution is more practical
- Update your agreements and policies based on lessons learned
The Employer’s Post-Employment Toolkit
| Tool | Still Available? | Key Requirement |
|---|---|---|
| Non-compete agreement | No (banned July 2023, with narrow exceptions) | Only for sale/dissolution of business |
| Non-solicitation agreement | Yes | Must be reasonable in scope and duration |
| Nondisclosure agreement | Yes | Must identify protected information |
| Trade secret protection (MUTSA) | Yes (no agreement required) | Must maintain reasonable secrecy measures |
| CFAA claim (unauthorized access) | Yes | Must revoke access to establish “without authorization” |
| Severance agreement with release | Yes | Must provide adequate consideration and comply with OWBPA/MHRA |
Common Mistakes Employers Make
Relying on a non-compete that no longer exists. If your standard employment agreement still contains a non-compete provision and it was signed after July 1, 2023, that provision is void. Do not assume it provides protection. Update your agreements to focus on non-solicitation and nondisclosure.
Failing to revoke system access. Every day a former employee retains access to your systems is a day of risk—and a day that weakens your legal position if you later need to bring a CFAA claim.
Not having written agreements at all. MUTSA provides baseline trade secret protection, but written nondisclosure and non-solicitation agreements are far stronger tools. Every employee with access to client relationships or confidential information should have a written agreement.
Waiting too long to act on violations. If a former employee is soliciting your clients or using your trade secrets, delay signals to the court that the harm is not serious enough to warrant intervention. Act within weeks, not months.
Overreacting to routine departures. Not every departure requires aggressive enforcement. Save your legal resources for situations where there is real evidence of misappropriation or solicitation—not for employees who simply took a better job.
When to Consult an Attorney
Post-employment enforcement involves intersecting federal and state laws, recent statutory changes, and fact-intensive analysis. Consider legal counsel when:
- A key employee is leaving for a direct competitor
- You discover evidence of data downloads, client solicitation, or trade secret misappropriation
- You need to evaluate whether a pre-2023 non-compete is still enforceable
- You are drafting new employment agreements and want enforceable post-employment protections
- You are considering seeking injunctive relief (a temporary restraining order or preliminary injunction)
- A former employee’s new employer contacts you about the employee’s obligations
The cost of proactive legal guidance is a fraction of the cost of losing a trade secret or a key client relationship.
For guidance on protecting your company after an employee departure, contact Aaron Hall, attorney for business owners, at aaronhall.com or 612-466-0040.