Tortious Interference Claims in Minnesota

What is tortious interference under Minnesota law?

Tortious interference is a “triangular tort.” It involves three parties: you, the person you have a contract or business relationship with, and a third-party outsider who disrupts that relationship and causes you economic harm. Minnesota recognizes two versions. One protects an existing contract; the other protects a prospective economic advantage you reasonably expected to gain. Neither is codified. Minnesota courts have built the tort from common-law principles, drawing on the Restatement (Second) of Torts.

The two versions guard different interests. As the Minnesota Supreme Court put it in Gieseke v. IDCA, Inc., 844 N.W.2d 210 (Minn. 2014), a claim for “interference with a contract protects an interest in the security of contractual relationships,” while a claim for “interference with business relationships protects an interest in the reasonable expectation of economic advantage.” That distinction matters because the law gives an existing, signed contract more protection than a relationship you merely hoped to form. The same court noted that “[g]reater protection is given to the interest in an existing contract than to the interest in acquiring prospective contractual relations.”

Choosing the right version is the first decision in any interference matter. If a competitor pulled a counterparty out of a contract you can produce, you are usually in the contract-interference lane. If the competitor took business you expected but had not yet signed, you are in the prospective-advantage lane, and the proof you must assemble is harder. Getting that classification right early shapes which documents you gather and which standard you have to meet.

What are the elements of tortious interference with a contract in Minnesota?

To win a tortious interference with contract claim in Minnesota, you must prove five elements. The Minnesota Supreme Court in Kjesbo v. Ricks, 517 N.W.2d 585 (Minn. 1994) stated that a claim “requires: ‘(1) the existence of a contract; (2) the alleged wrongdoer’s knowledge of the contract; (3) intentional procurement of its breach; (4) without justification; and (5) damages.’” The court reaffirmed that same five-element formulation two decades later in Sysdyne Corp. v. Rousslang, 860 N.W.2d 347 (Minn. 2015).

Read those elements in order, because each is a place a claim can fail. There must be an actual contract, not a loose understanding. The third party must have known the contract existed before acting. The defendant must have intentionally procured the breach, meaning the defendant set out to cause it, not merely competed nearby. The interference must have been without justification, an element that becomes the central battleground in most cases. And the breach must have caused you measurable damages. In my experience, most contract-interference disputes turn on elements three and four: did the outsider actually induce the breach, and did the outsider have a legitimate reason for what it did. A civil conspiracy claim sometimes accompanies these facts when two outsiders acted together.

How is tortious interference with prospective economic advantage different?

Tortious interference with prospective economic advantage protects a business relationship you expected but had not yet locked into a contract. In Gieseke v. IDCA, Inc., 844 N.W.2d 210 (Minn. 2014), the Minnesota Supreme Court held that a plaintiff must prove “the following five elements: 1) The existence of a reasonable expectation of economic advantage; 2) Defendant’s knowledge of that expectation of economic advantage; 3) That defendant intentionally interfered with plaintiffs reasonable expectation of economic advantage, and the intentional interference is either independently tortious or in violation of a state or federal statute or regulation; 4) That in the absence of the wrongful act of defendant, it is reasonably probable that plaintiff would have realized his economic advantage or benefit; and 5) That plaintiff sustained damages.”

The decisive difference sits in the third element. Interference with a signed contract is actionable when it is “without justification.” Interference with a prospective relationship is actionable only when it is “independently tortious or in violation of a state or federal statute or regulation,” a noticeably higher bar. Gieseke also added a practical hurdle: the plaintiff there lost because it “failed to specifically identify any third parties with whom it had a reasonable expectation of a future economic relationship.” A general claim that you would have won business in the market is not enough. You must point to identifiable customers or partners.

What does “improper means” or wrongful interference require?

For interference with a prospective relationship, the conduct must be independently wrongful. Gieseke limits the tort “to those circumstances in which the interference is intentional and independently tortious or unlawful, rather than merely unfair.” In plain terms: the competitor’s act has to be wrongful by some separate legal measure, such as a distinct tort like fraud or business defamation, or a violation of a statute or regulation. Conduct that is sharp-elbowed but lawful does not qualify, no matter how much business it costs you.

For interference with an existing contract, the standard is framed differently. The question is whether the interference was “without justification,” which Minnesota treats as a reasonableness inquiry into the defendant’s conduct under the circumstances. That is a lower bar for the plaintiff than the prospective-advantage tort, because a signed contract earns more legal protection than an unformed relationship. The reason behind both standards is the same: Minnesota courts will not let an interference claim punish ordinary lawful competition. Businesses are expected to compete hard for the same customers and employees, and doing so is not a tort.

Which defendant faces which claim: the breaching counterparty or the interfering competitor?

You may have claims against both, on different theories. The contracting party who walked away from your deal is a breach-of-contract defendant. The outside competitor who induced that breach is the tortious-interference defendant. A party to a contract cannot tortiously interfere with its own contract, so the interference claim runs only against the third-party outsider, never against the party who simply breached. If a customer leaves you mid-contract because a rival talked the customer into it, the customer owes you for breach, and the rival may owe you in tort.

This is why tortious interference and breach of contract are usually pleaded together. In one lawsuit, you can name the breaching counterparty on a breach-of-contract count and the interfering outsider on a tortious-interference count. The two counts seek overlapping but distinct recoveries, and they are frequently brought together in one lawsuit as separate counts. Sorting out which conduct belongs to which defendant early matters, because it determines who you name and what you must prove against each.

When a competitor hires away an employee or customer under contract

Yes, when a valid agreement was in place, the competitor knew about it, and the competitor induced the breach. In Kallok v. Medtronic, Inc., 573 N.W.2d 356 (Minn. 1998), the Minnesota Supreme Court held that if a restrictive covenant “is deemed valid and if the elements of tortious interference are established, interference with the noncompete agreement by a third party is a tort for which damages are recoverable.” The competitor there had recruited an employee into a job that breached his noncompete, and the court held the competitor liable.

One change since Kallok matters. Minnesota’s 2023 noncompete statute provides that “any covenant not to compete contained in a contract or agreement is void and unenforceable” under Minn. Stat. § 181.988. A void noncompete cannot be the agreement a competitor interferes with. But the same statute preserves other agreements: it states that a covenant not to compete “does not include a nonsolicitation agreement, or agreement restricting the ability to use client or contact lists, or solicit customers of the employer,” and likewise “does not include a nondisclosure agreement, or agreement designed to protect trade secrets or confidential information.” When a competitor induces an employee to breach a still-enforceable nonsolicitation or confidentiality agreement, the Kallok rule still applies. The firm’s overview of no-poach agreements between Minnesota employers covers a related restriction.

What defenses can the other side raise?

The central defense to a contract-interference claim is justification, and the defendant carries the burden of proving it. Kjesbo v. Ricks, 517 N.W.2d 585 (Minn. 1994) states that “the burden of proving justification is on the defendants,” and that “whether interference is justified is an issue of fact, and the test is what is reasonable conduct under the circumstances.” So once you prove the first three elements, the competitor must come forward with a legitimate reason for what it did. One recognized justification, drawn from the Restatement, is that the defendant acted to protect a legally protected interest of its own.

A defendant can also point to advice of counsel. In Sysdyne Corp. v. Rousslang, 860 N.W.2d 347 (Minn. 2015), the Minnesota Supreme Court held that the justification defense may be satisfied by a defendant’s reasonable reliance on advice of outside counsel. A competitor who hired your former employee after a lawyer told it the noncompete was unenforceable may rely on that advice, if the reliance was reasonable. For the prospective-advantage tort, the strongest defense is simply lawful competition: because that tort requires independently wrongful conduct, a defendant who competed within legal limits has not committed the tort at all. When interference is ongoing, a court order halting the conduct is sometimes pursued before the defenses are ever tested at trial.

What can I recover, and can I get punitive damages?

A successful plaintiff recovers the economic loss the interference caused. That typically means lost profits from the broken contract or relationship. It can also include the cost of enforcing the disrupted agreement: in Kallok, the damages award against the interfering competitor was measured by the attorney fees and other expenses the employer incurred enforcing the noncompete against its employee. A court can also order an injunction stopping a third party from continuing to interfere, which is often the most pressing remedy when a competitor is actively disrupting a live relationship. The firm covers the full picture of what your business can recover in a tortious interference claim separately, including how lost-profit damages are proven without straying into speculation.

Punitive damages are possible because tortious interference is an intentional tort, but Minnesota sets a demanding bar. Under Minn. Stat. § 549.20, “punitive damages shall be allowed in civil actions only upon clear and convincing evidence that the acts of the defendant show deliberate disregard for the rights or safety of others.” Procedurally, you cannot ask for punitive damages in your original complaint. Minn. Stat. § 549.191 provides that “the complaint must not seek punitive damages,” and that “after filing the suit a party may make a motion to amend the pleadings to claim punitive damages,” supported by affidavits showing a factual basis. Punitive damages are realistic only where the interference was deliberate and egregious, not in an ordinary competitive dispute.

Tortious interference gives a Minnesota business a real remedy when an outsider deliberately breaks up its contracts or relationships, but the two versions of the tort demand different proof, and lawful competition is not actionable under either. The practical first step is usually to separate the conduct: identify who breached, who induced the breach, and whether the inducement was wrongful by an independent legal measure. For a fuller picture of related claims, the firm’s business torts practice area is a useful starting point. If a competitor’s conduct has cost your business a contract or a key relationship, email [email protected] with a brief description and any relevant agreements for a practical read on whether an interference claim fits your facts.