Non-Solicitation Agreements in Minnesota

What Is a Non-Solicitation Agreement?

A non-solicitation agreement is an employee’s promise not to solicit the employer’s customers, its employees, or both for a set period after leaving. It limits whom the former employee may approach, while a noncompete limits where or for whom the employee may work. Minnesota’s noncompete statute treats the two differently for that reason. A “no solicitation” or “non-solicit” clause in a contract means the same thing, and the clause works the same way when the person signing it is an independent contractor or subcontractor rather than an employee.

The agreement comes in three forms:

• Customer non-solicitation. The employee agrees not to solicit the customers or clients the employee served or learned about through the job. The order affirmed in Softchoice, Inc. v. Schmidt, 763 N.W.2d 660 (Minn. App. 2009) barred a former branch manager from soliciting any client he had “solicited or did business with” for Softchoice.
• Employee non-solicitation. The employee agrees not to recruit coworkers away. The Softchoice offer letter combined both, stating “your agreement that you will not solicit employees or customers as detailed below if you choose to leave Softchoice.”
• No-hire clauses between businesses. A business agrees not to hire the other side’s employees. Two Minnesota statutes void some of these, as the next section explains.

A non-solicitation clause can sit beside a confidentiality clause in the same agreement. The noncompete ban excludes that clause too: “A covenant not to compete does not include a nondisclosure agreement, or agreement designed to protect trade secrets or confidential information” (Minn. Stat. § 181.988, subd. 1). The same subdivision defines an employee as “any individual who performs services for an employer, including independent contractors,” so a contractor’s non-solicitation clause stands on the same footing as an employee’s.

How Is a Workplace No-Solicitation Policy Different From a Non-Solicitation Agreement?

A workplace no-solicitation policy governs what employees may do while they still work for you, while a non-solicitation agreement governs what a departing employee may do after leaving. The policy is usually a handbook rule barring employees from soliciting coworkers, for a cause, a product, or a union, during working time or on company premises. Minnesota’s noncompete statute does not reach it; federal labor law sets its main limit. Employees have the right “to form, join, or assist labor organizations” and “to engage in other concerted activities for the purpose of collective bargaining or other mutual aid or protection” (29 U.S.C. § 157).

In Republic Aviation Corp. v. NLRB, 324 U.S. 793 (1945), the U.S. Supreme Court reviewed a presumption the National Labor Relations Board had set out in Peyton Packing Company. The Court found “no error in the Board’s adoption of this presumption” when it reviewed the Board’s orders. Under it, “Working time is for work,” and a rule “prohibiting union solicitation during working hours” “must be presumed to be valid in the absence of evidence that it was adopted for a discriminatory purpose” (the Board’s words, quoted in the Court’s footnote 10). A rule against union solicitation “outside of working hours, although on company property,” is presumed “an unreasonable impediment to self-organization and therefore discriminatory in the absence of evidence that special circumstances make the rule necessary in order to maintain production or discipline” under the same passage. I suggest limiting a no-solicitation policy to working time and enforcing it evenly, because a rule reaching breaks starts out presumed invalid, and evidence of a discriminatory purpose defeats the presumption that protects a working-time rule.

What Did Minnesota Ban, and What Did It Leave in Place?

Minnesota banned employee noncompetes in agreements entered into on or after July 1, 2023, and left employee non-solicitation agreements outside that ban. The ban’s two exceptions cover a covenant that will “prohibit the seller of the business from carrying on a similar business” and an agreement among “The partners, members, or shareholders, upon or in anticipation of a dissolution” of a partnership, limited liability company, or corporation. Separate laws void two business-to-business restrictions. One is a service provider’s limit, in contracts and agreements entered into on or after July 1, 2024, on its customers soliciting or hiring its employees. The other is a franchisor’s limit on franchisees soliciting or hiring employees of the franchisor or of a franchisee of the same franchisor.

The noncompete ban. “Any covenant not to compete contained in a contract or agreement is void and unenforceable” (Minn. Stat. § 181.988, subd. 2). The section “applies to contracts and agreements entered into on or after” July 1, 2023 (Minnesota Session Laws 2023, chapter 53, article 6, section 1). The sale exception covers a “temporary and geographically restricted covenant not to compete that will prohibit the seller of the business from carrying on a similar business within a reasonable geographic area and for a reasonable length of time,” and the dissolution exception lets “the partners, members, or shareholders” agree that “all or any number of the parties will not carry on a similar business within a reasonable geographic area where the business has been transacted” (§ 181.988, subd. 2(b)). Its definition excludes “a nonsolicitation agreement, or agreement restricting the ability to use client or contact lists, or solicit customers of the employer,” so those agreements are judged under the court-made rules in the sections below. For the other tools the ban leaves in place, see the other protections left after the noncompete ban.

Service contracts. “No service provider may restrict, restrain, or prohibit in any way a customer from directly or indirectly soliciting or hiring an employee of a service provider” (Minn. Stat. § 181.9881, subd. 2). A service provider is any business “acting directly or indirectly as an employer or manager for work contracted or requested by a customer” (subd. 1). For this section, an employee is “any individual who performs services for a service provider, including independent contractors” (subd. 1). A provision that violates the rule “is void and unenforceable,” and “the service provider must provide notice to their employees of this section and the restrictive covenant in the existing contract that violates this section” (subd. 2). The section applies to “contracts and agreements entered into on or after” July 1, 2024 (Minnesota Session Laws 2024, chapter 110, article 2, section 12). Subdivision 3 exempts “workers providing professional business consulting for computer software development and related services who are seeking employment through a service provider with the knowledge and intention of being considered for a permanent position of employment with the customer as their employer at a later date.” When I analyzed a growing service business’s client agreement, its mutual non-solicitation clause covered each side’s employees, and the half barring the business’s clients from hiring its people was void in every agreement signed since July 1, 2024.

Franchise agreements. “No franchisor may restrict, restrain, or prohibit in any way a franchisee from soliciting or hiring an employee of a franchisee of the same franchisor,” and the same rule protects hiring “an employee of the franchisor” (Minn. Stat. § 181.991, subd. 2). A violating provision “is void and unenforceable,” and “the franchisee must provide notice to their employees of this law.” There, an employee “means an individual employed by an employer and includes independent contractors” (§ 181.991, subd. 1). Franchisors carry their own duty: “no later than May 24, 2024, franchisors shall: (1) amend existing franchise agreements to remove any restrictive employment provision that violates subdivision 2; or (2) sign a memorandum of understanding with each franchisee that provides that any contract provisions that violate subdivision 2 in any way are void and unenforceable, and provides notice to the franchisee of their rights and obligations under this section” (§ 181.991, subd. 3).

Both statutes govern restrictions between businesses: a service provider and its customer, and a franchisor and its franchisees. For clauses between businesses generally, see non-solicitation clauses between businesses.

How Do Minnesota Courts Decide Whether a Non-Solicitation Agreement Is Reasonable?

A Minnesota court asks whether the restriction protects your business or goodwill and, if so, whether it restrains the former employee more than that protection needs. Customer relationships the employee built on your behalf are an interest Minnesota courts protect. A court that finds the clause too broad can narrow it.

The Minnesota Supreme Court set the test in Bennett v. Storz Broadcasting Co., 134 N.W.2d 892 (Minn. 1965): “The test applied is whether or not the restraint is necessary for the protection of the business or good will of the employer, and if so, whether the stipulation has imposed upon the employee any greater restraint than is reasonably necessary to protect the employer’s business, regard being had to the nature and character of the employment, the time for which the restriction is imposed, and the territorial extent of the locality to which the prohibition extends.” The court also wrote that “Such contracts are looked upon with disfavor, cautiously considered, and carefully scrutinized.”

Customer protection is the core interest the test recognizes. Bennett noted that “this court has uniformly upheld covenants in a contract of employment designed to protect the employer against the deflection of trade or customers by the employee by means of the opportunity which the employment has given him.”

In Davies & Davies Agency, Inc. v. Davies, 298 N.W.2d 127 (Minn. 1980), an insurance agency’s covenant barred a former employee from the insurance business within 50 miles of three cities for five years. The court concluded that “It appears that the agency’s actual need for protection is limited to prohibiting its former employees from actively soliciting business from agency customers.” It approved the trial court’s rewrite, explaining that “in employment cases, a court should be permitted to make changes such as those made by the trial court in this case rather than be compelled to strike down the entire agreement as unreasonable.” That equitable modification is a fallback, and I suggest drafting the clause to the narrower scope from the start, because a court that has to rewrite the clause decides the scope for you. For drafting detail, see drafting restrictive covenants that hold up.

How Long and How Far Can a Non-Solicitation Agreement Reach?

A Minnesota court decides the acceptable length of a non-solicitation agreement case by case. It weighs the job, the time needed to replace the employee, and the time customers need to get used to the replacement. A one-year customer non-solicit has been upheld. A covenant without a territorial limit is not per se unenforceable, and the Minnesota Court of Appeals has called a territorial limitation “often an irrelevant factor” for a non-solicitation covenant.

Duration. The Minnesota Court of Appeals stated the standard in Softchoice. “The reasonableness of a temporal restriction depends on the nature of the job, the amount of time necessary to find and train a replacement for the employee, and the amount of time necessary for the employee’s customers to become accustomed to the employee’s replacement.” The record showed that relationships in the branch manager’s job took over a year to build. On that record, the court held “the one-year duration of the non-solicitation period ordered by the district court was not unreasonable.” The court also wrote that “Softchoice has a legitimate business interest in protecting ongoing customer relationships that it has spent years developing and nurturing.” In Davies, the trial court cut a five-year period to one year, using the time a replacement needed to obtain licenses and learn the business.

Geography. In Dynamic Air, Inc. v. Bloch, 502 N.W.2d 796 (Minn. App. 1993), the agreement had two-year covenants and no territorial limit. The court held: “Accordingly, we hold that a restrictive covenant on employment, lacking a territorial limitation, is not per se unenforceable.” For the confidentiality and non-solicitation covenants, the court wrote that “a territorial limitation is often an irrelevant factor.” It noted the Wisconsin Supreme Court’s view “that a territorial limit is irrelevant in a nonsolicitation covenant because the restriction to former clients is sufficiently narrow,” and added, “We find this reasoning persuasive.”

Each covenant on its own. Dynamic Air also directed the trial court to “consider the three covenants separately”: confidentiality, non-solicitation, and a ban on working for a competitor. A court may enforce your non-solicitation clause even when another clause in the same agreement fails. I suggest numbering each restriction as its own section, because the numbering makes that separate review easy to follow.

When Does a Non-Solicitation Agreement Need New Consideration?

A non-solicitation agreement signed as part of the original job offer needs nothing extra. One presented after the employee has accepted the job or started work needs independent consideration, such as a raise, bonus, or promotion the employee would not otherwise have received.

In National Recruiters, Inc. v. Cashman, 323 N.W.2d 736 (Minn. 1982), recruiters were told their pay and benefits, started work, and only then were told to sign a restrictive covenant. The Minnesota Supreme Court held: “Where such a covenant is not ancillary to the initial oral employment contract, it can be sustained only if supported by independent consideration.” It called the practice of withholding conditions until after the job is accepted one that “takes undue advantage of the inequality between the parties,” and held the covenant invalid.

The answer turns on what the employee received. Davies held that “The adequacy of consideration for a noncompetition contract or clause in an ongoing employment relationship should depend on the facts of each case.” An employee who signed four months in and then spent ten years advancing at the agency had consideration. A second employee, asked to sign eleven days after starting, did not.

Timing within a promotion matters too. In Softchoice, the non-solicitation agreement sat in a promotion offer letter. The court held “that a promotion serves as consideration for a non-compete agreement at the time when the terms of the promotion have been defined and the promotion has been formally offered and accepted in writing.” I suggest putting the agreement in the written offer, signed before the first day or with the written promotion, because that sequence is the one these cases upheld.

When Does a Non-Solicitation Clause Become a Void Noncompete?

A clause becomes a void noncompete when it restricts the former employee from working, whatever its heading says. If the clause bars work for another employer for a period, work in an area, or work in a similar role, and the agreement was entered into on or after July 1, 2023, Minnesota law voids it. The exceptions reach only a sale covenant that will “prohibit the seller of the business from carrying on a similar business” and an agreement among “The partners, members, or shareholders, upon or in anticipation of a dissolution of a partnership, limited liability company, or corporation.”

Under § 181.988, subd. 1, a covenant not to compete is an agreement that “restricts the employee, after termination of the employment, from performing”:

• “work for another employer for a specified period of time”;
• “work in a specified geographical area”; or
• “work for another employer in a capacity that is similar to the employee’s work for the employer that is party to the agreement.”

A clause titled “Non-Solicitation” that also bars the employee from working for a competitor for a year, or in a similar sales role, fits that definition in part. The void clause does not take the rest of the agreement down with it: “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” (subd. 2). Pressing the void part has a cost, because “a court may award an employee who is enforcing rights under this section reasonable attorney fees” (subd. 2).

The court’s power to narrow a covenant does not save a voided one. The statute’s words are “void and unenforceable,” so a work restriction in an agreement entered into on or after July 1, 2023, is out, other than the sale-of-business and dissolution covenants subd. 2(b) allows. I suggest keeping the non-solicitation clause limited to solicitation and keeping any work restriction out of it, because of the attorney-fee award subd. 2 allows.

What Counts as a Violation of a Non-Solicitation Agreement?

A violation is conduct the clause’s own words prohibit. A clause barring solicitation reaches the former employee’s outreach to covered customers or employees; a clause that also bars contacting or accepting business from them reaches more. Before the employee leaves, a separate duty of loyalty bars soliciting your customers even without any agreement.

The words control. Courts read the clause you wrote, and “It is well-established that any ambiguity in a contract will be resolved against the draftsman” (Cherne Industrial, Inc. v. Grounds & Associates, Inc., 278 N.W.2d 81 (Minn. 1979)). In Sysdyne Corp. v. Rousslang, 860 N.W.2d 347 (Minn. 2015), the employee had agreed that for 12 months he would not “in any manner contact, solicit or cause to be solicited, customers or former or prospective customers” of his employer in seven metro counties. That clause reached contact, not only solicitation.

Active solicitation. In Davies, the Minnesota Supreme Court limited an agency’s covenant to “actively soliciting business from agency customers.” The trial court found that the former employee “did not solicit bonds for anyone following the termination of his employment with the agency.” The Supreme Court wrote, “There is sufficient support for this conclusion in the record, and therefore plaintiff is not entitled to damages,” and “the denial of damages is affirmed.”

Broader terms. The noncompete ban’s exclusion reaches “a nonsolicitation agreement, or agreement restricting the ability to use client or contact lists, or solicit customers of the employer” (§ 181.988, subd. 1). A term barring the former employee from accepting business from covered customers is not on that list. Before adding one, I suggest testing it against the statute’s three-part definition in the section above, because, in an agreement entered into on or after July 1, 2023, a term that restricts work for another employer is void whatever it is called. A clause should also say whether it covers customers the employee served, all company customers, or prospects, because each choice changes what Bennett and Davies call reasonable.

Before the employee leaves. “An employee’s duty of loyalty prohibits her from soliciting the employer’s customers for herself, or from otherwise competing with her employer, while she is employed” (Rehabilitation Specialists, Inc. v. Koering, 404 N.W.2d 301 (Minn. App. 1987)). The same court added that “An employee has the right, therefore, while still employed, to prepare to enter into competition with her employer.” Where preparation ends and solicitation begins “is a question of fact to be determined based on all the circumstances of the case.” See an employee’s duty of loyalty while still employed.

How Do You Prove Solicitation of Employees or Customers?

You prove solicitation with records of what the former employee did, because whether someone solicited is a question of fact decided on the evidence. In Davies, the damages claim failed on the trial court’s finding of no solicitation, described above. Proof of soliciting employees works the same way as proof of soliciting customers.

The evidence that usually shows solicitation of employees:

• Who moved, and when. A list of the coworkers who resigned after the person left, the dates, and where each went.- Messages. Texts, LinkedIn or other social-media messages, and emails from the former employee to current staff, including any sent from a personal account.
• What the departing employees say. Exit interviews and statements from employees who were approached, including the ones who stayed. An employee who turned down an offer can be a useful witness.
• The new company’s hiring trail. Job postings, referral bonuses, and offer letters timed to your staff.

For customers, add the customer list and who could open it, emails forwarded to personal accounts before departure, call and calendar records, and which customers moved their business and when. The same records show whether the customer reached out first, which matters under a clause limited to soliciting.

I suggest preserving all of it before any letter goes out. Much of it sits in your own systems (email, phone, customer-management, and file-access logs), and a demand letter can prompt the other side to start deleting.

What Happens if You Break a Non-Solicitation Agreement?

A former employee who breaks a valid non-solicitation agreement can be sued for money damages and ordered to stop. The company that hired the employee can be sued too when it knowingly procured the breach without justification. A dispute can start with a cease-and-desist letter, though no rule requires one before a lawsuit.

The usual sequence runs this way:

1. A demand letter. The former employer writes to the former employee, and often the new employer, identifying the agreement and the conduct and demanding that it stop. A letter costs far less than a lawsuit and gives both sides a chance to comply.
2. A lawsuit and a motion to stop the solicitation. If the conduct continues, the former employer sues for breach of contract and asks the court for a temporary restraining order or temporary injunction, covered in the next section.
3. Damages and fees. The case then turns to what the employer lost or what the employee gained, and to whether the agreement or a statute shifts attorney fees.

Enforcement is only as strong as the agreement. A clause that fails the reasonableness test, lacked consideration, or operates as a noncompete the 2023 ban voids gives the employer nothing to enforce, and the last of those can cost the employer the employee’s attorney fees. The sections below cover each remedy and the risks an employer takes on in pursuing it.

How Does a Court Decide Whether to Stop the Solicitation?

A Minnesota court can stop solicitation before trial with a temporary restraining order (TRO) or a temporary injunction. It weighs five factors, the most important being your likelihood of winning, and it weighs the harm to each side. A clause declaring that any breach causes irreparable harm does not decide that question.

The procedure. A TRO without notice requires that “it clearly appears from specific facts shown by affidavit or by the verified complaint that immediate and irreparable injury, loss, or damage will result to the applicant before the adverse party or that party’s attorney can be heard in opposition” (Minn. R. Civ. P. 65.01). “No temporary injunction shall be granted without notice of motion or an order to show cause to the adverse party” (Rule 65.02). Either order requires security from you “for the payment of such costs and damages as may be incurred or suffered by any party who is found to have been wrongfully enjoined or restrained” (Rule 65.03).

The five factors. Softchoice applied them to a non-solicitation agreement: “1) the nature of the relationship between the parties preexisting the dispute giving rise to the request for relief, 2) the harm to be suffered by one party if the temporary injunction is denied compared with the harm inflicted on the other party if relief is granted, 3) the likelihood that one party or the other will prevail on the merits, 4) public policy, and 5) the administrative burdens in supervising and enforcing the injunction.” The court wrote: “Of these factors, the most important is a party’s likelihood of prevailing on the merits at trial.”

Irreparable harm. St. Jude Medical, Inc. v. Carter, 913 N.W.2d 678 (Minn. 2018) involved a permanent injunction after trial on a noncompete, and its rules on harm come from that posture. The court recognized that harm may be inferred in “situations where customer good will is at stake, when an employee takes business secrets with an intent to benefit from the secrets, or when a risk exists that the secrets will be disclosed in the subsequent employment and result in irreparable damage.” It added that “such an inference can be rebutted by evidence to the contrary,” and that the employer “must show more than the breach of the restrictive covenant.” The agreement’s clause declaring irreparable harm did not bind the court: “Allowing the terms of private agreements to dictate whether a court must issue an injunction would interfere with a court’s equitable jurisdiction and powers.”

Timing. An order to enforce the covenant itself generally ends with the covenant. Cherne stated: “Thus, if the restrictive period of a covenant not to compete has expired, an injunction will not be granted to enforce the covenant.” The court added: “Nevertheless, there may be situations where injunctive relief extending beyond the expiration of the period established by the covenant is appropriate.” In Cherne itself, the court upheld a 2-year injunction as a remedy for breach of the former employees’ duty not to use confidential information, and did not decide whether the covenant alone could support it. I suggest moving quickly once you find a breach, because a covenant that runs out during the case takes the injunction with it. For how these motions run, see how temporary injunction motions run in Minnesota.

What Money Damages Can an Employer Recover for a Breach?

A Minnesota employer can recover the profits it lost because of the breach, if it proves them with reasonable certainty, or in some cases the profits the former employee made from your customers. A liquidated damages clause is enforced only if it meets a two-part test, and punitive damages are not available for a breach of contract alone.

The claim. You prove “(1) formation of a contract, (2) performance by plaintiff of any conditions precedent to his right to demand performance by the defendant, and (3) breach of the contract by defendant” (Lyon Financial Services, Inc. v. Illinois Paper & Copier Co., 848 N.W.2d 539 (Minn. 2014)).

Lost profits. Under Minnesota’s general contract rule, lost profits “may be recovered where they are shown to be the natural and probable consequences of the act or omission complained of and their amount is shown with a reasonable degree of certainty and exactness,” and “The controlling principle is that speculative, remote, or conjectural damages are not recoverable” (Cardinal Consulting Co. v. Circo Resorts, Inc., 297 N.W.2d 260 (Minn. 1980)). In Sysdyne, “The trial court entered judgment against Rousslang in the amount of $158,240 plus costs and interest on the breach of contract claim,” with respect to customers he brought with him to his new employer.

The employee’s gain. In Cherne, former employees took customer information and used it to win contracts with their former employer’s customers. The court held that “where an employee wrongfully profits from the use of information obtained from his employer, the measure of damages may be the employee’s gain,” and affirmed an award that represented “10 percent of defendants’ revenue from contracts with former or prospective customers of Cherne.” It also held that a plaintiff who establishes the breach “may obtain both injunctive relief and damages.”

Liquidated damages. A sum fixed in advance is not enforceable unless “the amount so fixed is a reasonable forecast of just compensation for the harm that is caused by the breach” and “the harm that is caused by the breach is one that is incapable or very difficult of accurate estimation” (Gorco Construction Co. v. Stein, 99 N.W.2d 69 (Minn. 1959)). See liquidated damages versus penalty clauses.

Punitive damages. “The general rule is that punitive damages are not recoverable in actions for breach of contract” (Cherne). “Unless the willful and malicious conduct constitutes an independent tort, Minnesota law does not permit recovery of punitive damages” (Barr/Nelson, Inc. v. Tonto’s, Inc., 336 N.W.2d 46 (Minn. 1983)). Where a tort supports them, they are allowed “only upon clear and convincing evidence that the acts of the defendant show deliberate disregard for the rights or safety of others” (Minn. Stat. § 549.20, subd. 1). “Upon commencement of a civil action, the complaint must not seek punitive damages” (Minn. Stat. § 549.191); a party may add the claim only by a motion that “must be accompanied by one or more affidavits showing the factual basis for the claim.”

A dollar figure in a demand letter is a negotiating position, and the rules above decide what a court can award. In one demand I analyzed for a former employee, the former employer framed its figure as its legal fees plus the cost of replacing the employee who left.

When Can an Employer Recover Its Attorney Fees?

A Minnesota employer recovers its attorney fees only when the agreement has a fee clause, a statute allows fees, or a recognized exception applies. One exception lets you recover, from a competitor that wrongfully caused the breach, the fees you spent enforcing the agreement against the employee.

The default rule. “We have long held that attorney fees are not recoverable in litigation unless there is a specific contract permitting or a statute authorizing such recovery” (Barr/Nelson). Cherne stated the same rule: “Generally attorneys fees may not be awarded to a successful litigant absent specific contractual or statutory authority.” I suggest a fee clause in every non-solicitation agreement, because without one each side pays its own lawyers unless a statute or the exception below applies.

Fees from the interfering competitor. In Kallok v. Medtronic, Inc., 573 N.W.2d 356 (Minn. 1998), a noncompete case, the court held that “the third-party litigation exception to the American rule permits a court to award attorney fees as damages if the defendant’s tortious act thrusts or projects the plaintiff into litigation with a third party.” Medtronic recovered from the hiring company “the attorney fees and other expenses it incurred in enforcing its noncompete agreements with Kallok.”

Trade secret fees. If the customer information is a trade secret, “If (i) a claim of misappropriation is made in bad faith, (ii) a motion to terminate an injunction is made or resisted in bad faith, or (iii) willful and malicious misappropriation exists, the court may award reasonable attorney’s fees to the prevailing party” (Minn. Stat. § 325C.04). Under the federal Defend Trade Secrets Act, an employer that left the whistleblower-immunity notice out of an employee agreement “may not be awarded exemplary damages or attorney fees” against that employee (18 U.S.C. § 1833(b)), as the federal-law section below explains.

How Can the Company That Hired the Employee Be Liable?

The hiring company is liable for tortious interference with contract when it knew of your agreement, intentionally procured its breach without justification, and caused you damages. Tortious interference is a claim against someone who is not a party to the contract but wrongfully causes a party to break it. You must show “more than the mere offering of a job,” and a company that reasonably relied on its attorney’s advice after a reasonable inquiry may be justified.

The elements. Kallok listed them: “(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 held that “if a noncompete agreement 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.” In Kallok, the hiring company’s chief executive knew of the agreements, met with the employee on numerous occasions, and gave its outside counsel incomplete information. The court held that it “may not rely upon an infirm consultation with counsel and the resulting advice as a justification for its action.”

More than a job offer. In National Recruiters, the claim against the new employers failed because the employer did not prove they intentionally procured a breach: “National must show more than the mere offering of a job.”

Advice of counsel. In Sysdyne, the hiring company sent the employee’s agreement to its outside counsel, was told it was unenforceable, and hired him. The court held that “the justification defense to tortious interference with contract may encompass reasonable reliance on advice of counsel,” and that “the trial court did not err in concluding that Xigent,” the hiring company, “met its burden of proving the justification defense.” The employee still owed the contract judgment, and the court noted the hiring company was “ultimately responsible for this amount because it agreed to cover any legal fees associated with Rousslang’s move.”

Writing to the new employer changes its position. When a former employee asked me about a former employer’s demand under an employee non-recruiting clause, the former employer had also written to the new employer, claiming the company interfered with the agreement and threatening an injunction and damages. That letter gave the new employer its own exposure from the same facts. For how the hiring company sees these claims, see the hiring company’s side of an interference claim.

Can You Work for Someone Who Signed a Non-Solicitation Agreement With Your Employer?

Often yes, because the agreement binds the person who signed it, not you. Whether your move puts anyone at risk turns on the words of their clause and on what each of you does. The common situation is a former coworker who left, started a competing company, and now wants to hire you, a current employee who signed nothing.

Their clause, not yours. A non-solicitation agreement lets the person who signed it compete; it limits whom that person may approach. If the clause bars soliciting or recruiting your employer’s employees, your former coworker’s outreach to you may breach it. If the clause also bars hiring, employing you may breach it even if you made the first call. A clause limited to customers says nothing about hiring you. I suggest asking to see the clause, because its words decide which of these applies.

Your own exposure. Signing nothing does not end the question, because the claim against a non-party is tortious interference. Under Kallok, the employer would have to prove you knew of the agreement, “intentional procurement of its breach,” that you acted “without justification,” and damages. Knowing about the agreement is only one of those elements. As National Recruiters shows, a job offer alone did not prove intentional procurement. Recruiting other coworkers to follow you, or bringing customers along for the new company, is the kind of active role that moves you closer to the line.

While you still work there. Your own duty of loyalty applies until you leave. Under Koering, you may “prepare to enter into competition” while still employed, but you may not solicit your employer’s customers for the new company before you go.

The new company’s risk. A new venture that hires a former employer’s staff in breach of its founder’s clause invites the lawsuit described in the sections above: against the founder for breach, and against the venture as the hiring company. I suggest that a new venture founder have the clause reviewed before making offers, because Sysdyne shows that reasonable reliance on an attorney’s advice can be a defense.

How Can an Employee Get Around a Non-Solicitation Agreement?

An employee bound by a non-solicitation agreement can work within it lawfully by reading its exact scope, competing without soliciting, testing whether it is enforceable at all, and negotiating a release. Ignoring it is the expensive route, because the remedies in the sections above run against the employee first.

1. Read your own agreement. Note what it covers (customers, employees, or both), which customers (only those you served, all customers, or prospects), how long it runs, and whether it bars only soliciting or also contacting, accepting business, or hiring. Courts resolve “any ambiguity in a contract” against the side that drafted it (Cherne).
2. Test the new job against that scope. A non-solicitation agreement usually leaves you free to work for a competitor or start one. Under a clause limited to active solicitation, as in Davies, a customer who comes to you on their own is a different case from one you call. A clause with “contact” or “accept” language, like the one in Sysdyne, reaches more.
3. Check whether a work restriction is void. In an agreement entered into on or after July 1, 2023, a restriction on working for another employer, in an area, or in a similar role is void under § 181.988 unless a sale or dissolution exception applies. A court may award you reasonable attorney fees for enforcing that right.
4. Check consideration. If you signed after you had already accepted the job or started work, National Recruiters requires independent consideration for the covenant. Without it, the covenant may be invalid.
5. Take nothing. I suggest leaving customer lists, files, and confidential information behind. Taking them adds trade secret claims and the remedies in Cherne to the breach claim.
6. Weigh the consequences. A breach can bring an injunction, damages measured by the employer’s lost profits or your own gain, and, under a fee clause, the employer’s attorney fees.
7. Negotiate a release or a narrower scope. An employer may agree to release a specific customer or person, or shorten the period, in exchange for a written commitment on the rest, and a new employer can negotiate this on your behalf.

How Do Federal Law and Other States’ Laws Affect a Minnesota Non-Solicitation Agreement?

The Federal Trade Commission has removed its Non-Compete Rule from the Code of Federal Regulations. Federal trade secret law still matters, because it requires a notice in an agreement that governs confidential information and is entered into or updated after May 11, 2016. When a contract names another state’s law, a Minnesota court may apply it, subject to a Minnesota rule for noncompete claims.

The FTC rule is gone. The Federal Trade Commission’s 2024 rule was set aside in court, and in February 2026 the Commission published that “this final rule removes the Non-Compete Rule codified at 16 CFR part 910 from the Code of Federal Regulations” (91 FR 6507).

The immunity notice. “An employer shall provide notice of the immunity set forth in this subsection in any contract or agreement with an employee that governs the use of a trade secret or other confidential information” (18 U.S.C. § 1833(b)(3)). Without it, “the employer may not be awarded exemplary damages or attorney fees under subparagraph (C) or (D) of section 1836(b)(3) in an action against an employee to whom notice was not provided.” The notice rule “shall apply to contracts and agreements that are entered into or updated after the date of enactment of this subsection,” and the statute’s note gives that date as May 11, 2016.

Customer lists as trade secrets. When the customer information itself qualifies, two trade secret claims sit beside the contract claim. The Minnesota Uniform Trade Secrets Act (MUTSA) covers information, “including a formula, pattern, compilation, program, device, method, technique, or process,” that “derives independent economic value, actual or potential, from not being generally known to, and not being readily ascertainable by proper means by, other persons who can obtain economic value from its disclosure or use,” and “is the subject of efforts that are reasonable under the circumstances to maintain its secrecy” (Minn. Stat. § 325C.01, subd. 5). Misappropriation includes “acquisition of a trade secret of another by a person who knows or has reason to know that the trade secret was acquired by improper means” (subd. 3). In Cherne, decided before MUTSA, the court held that “a finding that the customer lists are confidential was reasonably supported by the evidence.” For how that definition works, see when a customer list is a trade secret.

Trade secret remedies. “Actual or threatened misappropriation may be enjoined” (Minn. Stat. § 325C.02). “Damages can include both the actual loss caused by misappropriation and the unjust enrichment caused by misappropriation that is not taken into account in computing actual loss,” and “If willful and malicious misappropriation exists, the court may award exemplary damages in an amount not exceeding twice any award made under paragraph (a)” (Minn. Stat. § 325C.03). MUTSA leaves “contractual remedies, whether or not based upon misappropriation of a trade secret” in place (Minn. Stat. § 325C.07). The federal Defend Trade Secrets Act (DTSA) allows a civil action “if the trade secret is related to a product or service used in, or intended for use in, interstate or foreign commerce” (18 U.S.C. § 1836(b)(1)) and requires that “the owner thereof has taken reasonable measures to keep such information secret” (18 U.S.C. § 1839). A DTSA injunction may not “prevent a person from entering into an employment relationship,” and conditions on that employment must “be based on evidence of threatened misappropriation and not merely on the information the person knows.”

Other states’ laws. Other states set their own rules, and a contract’s choice-of-law clause can decide which one applies. In Softchoice, one employee’s agreements named Missouri law, and the Minnesota Court of Appeals cited earlier authority “stating that Minnesota courts give effect to the parties’ choice of law in a contract,” then judged that agreement under Missouri law. For noncompete claims, Minnesota limits that choice: “An employer must not require an employee who primarily resides and works in Minnesota, as a condition of employment,” to agree to a provision that would “require the employee to adjudicate outside of Minnesota a claim arising in Minnesota” or “deprive the employee of the substantive protection of Minnesota law with respect to a controversy arising in Minnesota.” For that rule, “adjudication includes litigation and arbitration,” and “This subdivision applies only to claims arising under this section” (§ 181.988, subd. 3). When an executive’s spouse asked me about the executive’s offer package, I asked where she would be based and whether the agreement named a particular state’s law. Agreements between competing employers not to hire each other’s staff raise antitrust issues instead; see no-poach agreements between employers.

What Risks Does an Employer Take On When It Enforces a Non-Solicitation Agreement?

Enforcing a non-solicitation agreement carries risks of its own. Contact with the new employer that goes too far can bring an interference or defamation claim, and the security you post can pay the employee’s losses if the injunction proves wrongful. A clause that operates as a noncompete can cost you the employee’s attorney fees, and a customer contract barring clients from hiring your employees can be void.

Letters to the new employer. In Bennett, the employer’s attorneys wrote the radio station negotiating with a departing announcer, and “KSTP thereupon withdrew from further negotiations with plaintiff.” The announcer sued his former employer for interference. The Minnesota Supreme Court reversed summary judgment for the employer: “As we view the record, there are important fact questions which should be answered before it can be said that justification appears as a matter of law.” I suggest sending such a letter only after confirming the clause is enforceable and that the conduct falls inside it, because the letter’s justification rests on both.

Words about the former employee. In National Recruiters, the employer’s owner called the recruiter’s new employer and called the recruiter “nothing but a god damn loser,” and the court held the words “to be slander per se” as a matter of law. I suggest keeping every communication about a departed employee to the agreement and the conduct, because a personal attack can create a claim against you.

Security and fees. If a court finds the employee was wrongfully enjoined, the security you posted under Rule 65.03 is available to pay the employee’s costs and damages. If your clause operates as a noncompete in an agreement entered into on or after July 1, 2023, a court may award the employee reasonable attorney fees under § 181.988, subd. 2.

Clauses with customers. A service provider’s restriction on a customer hiring its employees is void in contracts entered into on or after July 1, 2024, under § 181.9881, as the section on what Minnesota banned explains. Pressing one invites the customer to point out that it is void.

Deadlines. A contract claim, a MUTSA claim, and a DTSA claim each carry a deadline to sue. I suggest checking the current text of Minn. Stat. § 541.05, subd. 1, which covers an action “upon a contract or other obligation, express or implied, as to which no other limitation is expressly prescribed,” Minn. Stat. § 325C.06, and 18 U.S.C. § 1836(d) for the period that applies to you.

What Should a Minnesota Employer Do With Its Non-Solicitation Agreements Now?

I suggest reviewing each agreement for four things, each drawn from the authority discussed above. First, for an agreement entered into on or after July 1, 2023, confirm under § 181.988, subd. 1, that the restriction limits solicitation and contains no bar on working for another employer, in an area, or in a similar role. Second, under National Recruiters, Davies, and Softchoice, confirm it was part of the initial employment contract or, if signed later, was supported by independent consideration such as a written raise, bonus, or promotion. Third, as Softchoice and Davies show, confirm it names the covered customers and employees and runs for a period tied to how long your customer relationships take to transfer. Fourth, under 18 U.S.C. § 1833(b)(3), add the federal immunity notice if the agreement also covers confidential information. I also suggest adding a fee clause, because under Barr/Nelson each side otherwise pays its own lawyers.

I also suggest checking your customer contracts and any franchise agreement, because § 181.9881 and § 181.991 void certain no-hire clauses there and carry a notice duty to employees. A franchisor also had to amend its existing franchise agreements or sign a memorandum of understanding with each franchisee under § 181.991, subd. 3.

What Should a Minnesota Employer Do After Finding a Breach?

After finding a breach, I suggest reading the clause’s exact words against the conduct, and confirming the agreement had consideration and, for one signed on or after July 1, 2023, restricts no work in the three ways § 181.988 lists. I also suggest preserving the evidence first, as the section on proving solicitation describes.

Then match the remedy to the harm. A temporary injunction requires notice to the other side and security under Rule 65.03, and it turns on the five factors, of which your likelihood of winning weighs most. Damages require proof of lost profits with reasonable certainty or of the former employee’s gain. Fees require a fee clause, a statute, or a competitor’s wrongful interference. A letter to the new employer can support an interference claim, and it can also draw one back against you if the clause or the conduct does not hold up.

If you would like me to analyze your non-solicitation agreements, draft a version that fits your business, or assess what a breach lets you recover and stop, email [email protected] with a brief description. Please hold the agreements and any customer or confidential documents until an intake and conflict check are complete. For related employer questions, see my Minnesota employment law practice page.