Minnesota Rules on Non-Disparagement in Severance Deals

Key Takeaways

• Minnesota enforces non-disparagement clauses as ordinary contract provisions. There is no special “narrowly tailored” test or “close scrutiny” doctrine for them under Minnesota law.
• A non-disparagement clause binds you only if the severance agreement is validly formed: mutual assent plus consideration, which the severance payment usually supplies.
• The significant limits are federal. Overly broad clauses can violate the National Labor Relations Act, and pre-dispute clauses are unenforceable in sexual-harassment and sexual-assault disputes under the Speak Out Act.
• A non-disparagement clause cannot lawfully bar you from reporting unlawful conduct in good faith, which the Minnesota Whistleblower Act protects, and a release of Minnesota Human Rights Act claims can usually be rescinded within 15 days, though a release settling a claim already filed with an agency or court is final on execution.
• Minnesota’s 2023 non-compete ban voids employee non-competes but expressly excludes confidentiality, nondisclosure, and nonsolicitation terms from the ban, and a savings clause preserves other terms such as non-disparagement.

The Legal Framework: Ordinary Contract Law, Not a Special Statute

Non-disparagement clauses commonly appear in severance agreements, but Minnesota does not treat them as a special category. No Minnesota statute specifically regulates non-disparagement provisions in severance agreements, and no controlling Minnesota decision subjects them to a special overbreadth, vagueness, or “narrowly tailored” review. They are enforced under ordinary contract principles, limited only by general contract defenses such as indefiniteness or a term that violates public policy.

The scrutiny you may have heard about belongs to a different body of law. Minnesota’s employment-restraint statute, Minn. Stat. § 181.988, voids covenants not to compete but expressly excludes other agreement types. By its own terms, a “covenant not to compete does not include a nondisclosure agreement, or agreement designed to protect trade secrets or confidential information,” and it “does not include a nonsolicitation agreement, or agreement restricting the ability to use client or contact lists, or solicit customers of the employer.” It does not mention non-disparagement at all. So the reasonableness scrutiny Minnesota reserves for non-competes does not reach a non-disparagement clause, which is left to general contract law.

For contracts entered on or after July 1, 2023, Minnesota voids employee covenants not to compete outright: “Any covenant not to compete contained in a contract or agreement is void and unenforceable” (Minn. Stat. § 181.988, subd. 2(a)). That ban does not sweep in the rest of your severance package. The statute preserves the other terms: “Nothing in this subdivision shall be construed to render void or unenforceable any other provisions in a contract or agreement containing a void or unenforceable covenant not to compete” (Minn. Stat. § 181.988, subd. 2(c)). If a non-compete built into your severance deal is void, your non-disparagement, confidentiality, and release terms still survive.

One more provision of the same statute protects you directly. An employer may not require an employee who primarily resides and works in Minnesota, as a condition of employment, to agree to adjudicate a Minnesota claim outside Minnesota or to give up the substantive protection of Minnesota law (Minn. Stat. § 181.988, subd. 3). Watch for an out-of-state choice-of-law or forum clause in a severance agreement, because a Minnesota-based employee can resist it.

What Makes a Non-Disparagement Clause Enforceable

Because a non-disparagement clause is enforceable only as part of a valid contract, the severance agreement has to satisfy Minnesota’s ordinary contract-formation requirements: mutual assent and consideration.

Mutual assent is “a ‘meeting of the minds concerning [a contract’s] essential elements’” in the form of offer and acceptance, and “[w]hether mutual assent exists is tested under an objective standard” (SCI Minn. Funeral Servs., Inc. v. Washburn-McReavy Funeral Corp., 795 N.W.2d 855 (Minn. 2011)). Put simply, “[a] contract requires a meeting of the minds concerning its essential elements” (Minneapolis Cablesystems v. City of Minneapolis, 299 N.W.2d 121 (Minn. 1980)). In practice, a duty not to disparage binds only a party who actually agreed to it.

The objective standard matters when someone tries to walk away from a signed promise. Because assent is judged by what the parties objectively manifested through their words and conduct, your later regret or a secret, unexpressed intention does not undo a signed severance agreement (SCI Minn. Funeral Servs., Inc. v. Washburn-McReavy Funeral Corp., 795 N.W.2d 855 (Minn. 2011)).

Consideration is the second element: something of value each side gives up, which in a severance deal the severance payment or benefit typically supplies. Consideration “insures that the promise enforced as a contract is not accidental, casual, or gratuitous, but has been uttered intentionally as the result of some deliberation, manifested by reciprocal bargaining or negotiation,” so a promise supported by consideration is enforced as a contract (Cederstrand v. Lutheran Brotherhood, 263 Minn. 520 (1962)). If the employer breaches a validly formed severance agreement, you keep ordinary breach-of-contract remedies.

That last point matters because Minnesota employment is at-will by default: “The usual employer-employee relationship is terminable at the will of either” (Cederstrand v. Lutheran Brotherhood, 263 Minn. 520 (1962)). Your remedies depend on first having a validly formed agreement that changes that default. Absent an enforceable contract, there is nothing to breach.

Notice what is not on this list: “informed consent.” Minnesota does not impose a separate “informed consent” element of contract formation, and it does not impose a general common-law “informed consent” doctrine on severance agreements. The objective mutual-assent requirement already performs that role. Consideration and mutual assent are general elements of every contract, not a Minnesota-specific standard unique to non-disparagement clauses, and mutual assent does not bar a one-sided or take-it-or-leave-it term that you in fact sign.

Federal Limits That Actually Bind: The National Labor Relations Act

The most important modern limit on non-disparagement clauses is federal labor law, and it reaches non-union workplaces. Section 7 of the National Labor Relations Act gives employees the right “to engage in other concerted activities for the purpose of collective bargaining or other mutual aid or protection,” which includes discussing wages and workplace conditions (29 U.S.C. § 157). Section 8(a)(1) makes it “an unfair labor practice for an employer … to interfere with, restrain, or coerce employees in the exercise of the rights guaranteed in section 157” (29 U.S.C. § 158, (a)(1)).

In McLaren Macomb, 372 NLRB No. 58 (2023), the National Labor Relations Board held that merely offering a severance agreement containing broad non-disparagement and confidentiality provisions with a reasonable tendency to restrain Section 7 rights is unlawful. The protection reaches employees, not statutory supervisors, because the Act’s definition of “employee” excludes “any individual employed as a supervisor” (29 U.S.C. § 152, (3)). A non-disparagement clause broad enough to chill protected discussion of pay or working conditions can be an unfair labor practice regardless of your state contract law.

One 2025 development changes the practical risk, not the rule. On February 14, 2025, the NLRB Acting General Counsel rescinded GC 23-05, the enforcement-guidance memo interpreting McLaren Macomb, in a memorandum titled “Rescission of Certain General Counsel Memoranda” (NLRB GC 25-05). That is a change in enforcement priorities only. It does not overrule McLaren Macomb, which remains binding Board precedent, so the governing rule under Sections 7 and 8(a)(1) is unchanged even though the practical likelihood of an unfair-labor-practice charge has decreased.

The Speak Out Act and the Consumer Review Fairness Act

Two federal statutes limit non-disparagement clauses in specific settings.

Under the Speak Out Act, effective for claims filed on or after December 7, 2022, “no nondisclosure clause or nondisparagement clause agreed to before the dispute arises shall be judicially enforceable” in a sexual assault or sexual harassment dispute where the conduct is alleged to have violated federal, tribal, or state law (42 U.S.C. § 19403, (a)). If you signed a non-disparagement clause before a harassment or assault dispute arose, that clause is not enforceable against you in that dispute.

The Speak Out Act has boundaries. It does not stop an employer and an employee “from protecting trade secrets or proprietary information” (42 U.S.C. § 19403, (d)). And it sets only a federal floor: it does not preempt a state law “at least as protective of the right of an individual to speak freely,” so Minnesota may enforce its own protections that meet or exceed the federal standard (42 U.S.C. § 19403, (b)).

The Consumer Review Fairness Act addresses a different context, consumer reviews rather than employment. It makes a provision of a consumer form contract “void from the inception of such contract” if it “prohibits or restricts the ability of an individual who is a party to the form contract to engage in a covered communication,” meaning a review or assessment of the other party’s goods, services, or conduct (15 U.S.C. § 45b, (a)(2), (b)(1)(A)). Two features matter for a severance reader. First, the Act does not reach employment, because “[t]he term ‘form contract’ does not include an employer-employee or independent contractor contract” (15 U.S.C. § 45b, (a)(3)(B)). Second, even where it voids a clause, it preserves “any civil cause of action for defamation, libel, or slander” (15 U.S.C. § 45b, (b)(2)), so a business keeps its ordinary remedies against false statements.

Your Right to Report Unlawful Conduct

Whatever a non-disparagement clause says, you keep certain statutory rights that a private contract cannot strip away.

The Minnesota Whistleblower Act bars an employer from retaliating against you for good-faith reporting of unlawful conduct. An employer “shall not discharge, discipline, penalize, interfere with, threaten, restrain, coerce, or otherwise retaliate or discriminate against an employee” because the employee “in good faith, reports a violation, suspected violation, or planned violation of any federal or state law or common law or rule adopted pursuant to law to an employer or to any governmental body or law enforcement official” (Minn. Stat. § 181.932, subd. 1). The 2023 amendment added “interfere with, threaten, restrain, coerce” to the prohibited conduct and “location” to the protected terms of employment, and the statute was further amended in 2025.

The Act also protects a second act: refusing an illegal order. It reaches an employee who “refuses an employer’s order to perform an action that the employee has an objective basis in fact to believe violates any state or federal law or rule or regulation adopted pursuant to law, and the employee informs the employer that the order is being refused for that reason” (Minn. Stat. § 181.932, subd. 1(3)).

The protection has limits a drafter can rely on. It “does not permit an employee to make statements or disclosures knowing that they are false or that they are in reckless disregard of the truth” (Minn. Stat. § 181.932, subd. 3). And it “does not permit disclosures that would violate federal or state law or diminish or impair the rights of any person to the continued protection of confidentiality of communications provided by common law” (Minn. Stat. § 181.932, subd. 5). So a properly scoped clause can still reach knowingly false or defamatory statements and can still protect legally confidential information.

Minnesota Human Rights Act releases carry their own rule. A provision that purports to waive future MHRA rights is “contrary to public policy and void” (Minn. Stat. § 363A.31, subd. 1). A release of past MHRA claims “may be rescinded within 15 calendar days of its execution,” and the releasing party must be “informed in writing of the right to rescind” (Minn. Stat. § 363A.31, subd. 2).

That right has an express exception. A release “given in settlement of a claim filed with the department or with another administrative agency or judicial body is valid and final upon execution” (Minn. Stat. § 363A.31, subd. 2). If you signed to settle a charge already on file with the Minnesota Department of Human Rights, another agency, or a court, the 15-day window does not apply to you.

How a rescission is delivered decides whether it works. It must be in writing and delivered to the released party by hand, electronically with that party’s consent, or by mail within the 15-day period, and a mailed rescission must be postmarked within that period, properly addressed, and “sent by certified mail return receipt requested” (Minn. Stat. § 363A.31, subd. 2). Ordinary first-class mail does not satisfy the statute.

Waivers of federal age-discrimination claims are governed separately by the federal Older Workers Benefit Protection Act (29 U.S.C. § 626, (f)), which imposes its own “knowing and voluntary” disclosure and consideration-period requirements on a release of Age Discrimination in Employment Act claims.

Drafting a Non-Disparagement Clause That Holds Up

If you are the employer drafting the clause, precision is a best practice rather than a Minnesota legal requirement. There is no across-the-board rule that a non-disparagement clause is invalid unless it defines prohibited conduct and carves out truthful communication, because general contract law enforces a reasonable clause without those features. Still, specific regimes void overbroad restrictions, so the practical move is to specify the conduct you restrict and to preserve legally protected speech.

Two carve-outs are worth building in. Preserve the employee’s good-faith reporting right so the clause does not collide with the Whistleblower Act, and preserve protected concerted activity so it does not run into the National Labor Relations Act. You can still validly reach knowingly false or defamatory statements, and you can still protect genuine trade secrets and confidential information.

Watch the jurisdiction question if you operate across state lines, because some states impose an affirmative carve-out that Minnesota does not. In California, an employer may not require a nondisparagement provision that denies an employee the right to disclose information about unlawful acts in the workplace, such as harassment or discrimination, and any such provision must include statutory language preserving that right (Cal. Gov. Code § 12964.5). Minnesota has no equivalent requirement. If you draft for a multi-state workforce, the clause has to satisfy the strictest state whose law applies.

What “Recent Developments” Actually Means

You may see claims that recent Minnesota case law balances an employer’s reputation against an employee’s free-speech rights to decide whether a non-disparagement clause is enforceable. No published Minnesota appellate decision does that, and none subjects these clauses to a special free-speech or overbreadth review. The First Amendment provides that “Congress shall make no law … abridging the freedom of speech” (U.S. Const. amend. I). That guarantee limits government action, not private contracts. A negotiated non-disparagement clause is therefore treated as a voluntary waiver, enforceable under ordinary contract principles rather than subject to free-speech balancing.

The genuine recent developments are the ones above, and they are mostly federal: the NLRB’s McLaren Macomb decision in 2023 and the 2025 shift in its enforcement posture, plus the federal Speak Out Act in 2022. On the Minnesota side, the 2023 non-compete ban and the 2023 and 2025 amendments to the Whistleblower Act are the moving pieces, and none of them creates a special non-disparagement test.

Frequently Asked Questions

Can Non-Disparagement Clauses Affect Future Job References?

Minnesota law sets no default rule on whether a non-disparagement clause governs future job references. Because the clause is an ordinary contract term, whether references are covered turns on your specific severance agreement’s wording, which you are free to negotiate and put in writing before you rely on it. If references matter to you, negotiate language allowing a mutually approved reference statement so both sides know what may be said.

Are Verbal Non-Disparagement Agreements Enforceable in Minnesota?

A verbal non-disparagement agreement can be enforceable in Minnesota. It has to meet the ordinary elements of contract formation, meaning mutual assent and reasonably definite terms supported by consideration, and it must not fall within a category the statute of frauds requires to be in writing. The category that most often matters is an agreement that “by its terms is not to be performed within one year from the making thereof,” which must be in writing and signed by the party charged (Minn. Stat. § 513.01). That clause reaches only a promise that by its own terms cannot be completed within one year, such as a fixed term of two years. A permanent or indefinite non-disparagement promise generally falls outside it, because such a promise could end within a year, for example on the promisor’s death, so it does not need a writing on that ground, and an oral promise can stand if you can prove its terms.

How Do Non-Disparagement Clauses Impact Social Media Posts?

Minnesota law sets no default rule on whether a non-disparagement clause reaches an employee’s social media activity. Because the clause is an ordinary contract term, its reach turns on the scope the specific clause defines, so read that language before you post and keep in mind any good-faith reporting or protected-speech carve-outs it spells out.

Can Severance Pay Be Withheld for Violating Non-Disparagement Terms?

Minnesota law imposes no default rule on whether severance pay may be withheld or recovered for breaching a non-disparagement term. Because the clause is an ordinary contract term, any such consequence turns on the specific agreement’s payment and breach language, so read those terms closely before you assume a payment can be stopped or recovered.

Do Non-Disparagement Clauses Apply After the Severance Agreement Ends?

Minnesota law fixes no default duration for a non-disparagement obligation. Because the clause is an ordinary contract term, whether the obligation is time-limited or ongoing turns on the duration language the specific clause states, which is worth checking so you know how long the obligation lasts.