Non-Compete Contracts in North Dakota

The 24/7 workday is closer to being a reality now than it has ever been. With employees expected to read and acknowledge work emails at all hours of the day and night, it can feel like your employer is micromanaging you even when you are not at work. According to the law, employers can only impose rules about what employees do while they are employed, with very few exceptions. Of course, it usually takes a business contract lawyer to parse what those exceptions are. If you are facing such a dispute, whether you are the employer or the employee, a North Dakota business lawyer like Stephen Welle can help you determine what kind of restrictions, if any, the employer can set on the former employee’s activities. For one thing, employees will be relieved to find out that North Dakota is among the states that do not recognize non-compete clauses, also known as restrictive covenants, in business contracts.

What are Non-Compete Contracts?

A non-compete clause in an employment contract stipulates that, after the employee stops working for the business, the employee cannot open his or her own business in the same city in the same line of work. For example, if a tutor works for a college entrance exam prep company, after he or she stops working there, the employee cannot open his or her own test prep company in the same city. Likewise, a former employee of a burrito restaurant cannot open their own burrito restaurant.

The purpose of non-compete clauses is to help business owners protect their trade secrets. If you think they sound unfair, North Dakota law agrees with you. In North Dakota, you are free to open your own burrito restaurant even if you used to work for one. Burritos are not a trade secret; your former boss would have to prove that you misused proprietary knowledge, such as by following the old restaurant’s exact recipe at your new restaurant.

How Does North Dakota Law Treat Disputes Over Competition from Former Employees?

North Dakota allows businesses to protect trade secrets, but it does not allow non-compete contracts, although the line between a trade secret and simply a similar line of work can sometimes be blurry. In general, former entrepreneurial employees have the law on their side, and the former boss must prove that the former employee misappropriated a trade secret.

Likewise, if the company is headquartered outside of North Dakota, its non-compete clauses are not enforceable in North Dakota. If you think that a former employee of yours is using your proprietary information to gain an unfair advantage in competing with you, a small business lawyer can advise you on how best to proceed.

Contact O’Keeffe O’Brien Lyson Foss About Non-Compete Agreements

Business competition is legal, and North Dakota law protects the rights of businesses to compete fairly with each other. Stephen Welle is a business attorney dedicated to protecting the rights of employers and employees. Contact O’Keeffe O’Brien Lyson Foss in Fargo, North Dakota to discuss your case or call 701-235-8000 or 877-235-8002