Non-Competition Agreements in North Dakota

Non-competition agreements, also known as covenants not to compete or restrictive covenants, are employment contracts used by employers to limit the ability of an employee to compete with the employer by stealing customers or trade secrets. Such agreements are also used when a business is being sold or a partnership is being dissolved.  Enforceable agreements must strike a balance between protecting the employer's legitimate business interests from an unfair competitive advantage with the employee's right to work in a field for which he or she is trained.  In general, courts decide what is considered reasonable or not reasonable by examining the type and size of the business, how long and over what geographic area the restrictions apply and whether adequate consideration, or benefit, was given the employee at the time the agreement was signed.

The Law In North Dakota

North Dakota law prohibits any contract "by which anyone is restrained from exercising a lawful profession, trade, or business of any kind" between employers and employees.  The statute provides exceptions in the case of the sale of a business or dissolution of a partnership.