Minnesota House Bill Banning Non-Competes Stalls in Committee

Minnesota, like several other states across the country, is considering legislation to ban or severely limit the use of non-compete agreements. As discussed in a previous article, Minnesota House Bill 506: Banning Non-Compete Agreements, a bill was introduced in the Minnesota House of Representatives on February 11, 2013 that would ban non-compete agreements under many circumstances. Minnesota House Bill 506 has since been referred to the Labor, Workforce and Regulated Industries Committee for review. Since the Committee did not schedule a hearing on the bill and no companion file was introduced to the Senate, Bill 506 has stalled for the 2013 legislative session. The bill, however, remains viable for next year’s legislative session, and could have a significant impact on Minnesota businesses and employees.

Current State of Bill 506
For Bill 506 to have remained viable in 2013, the Labor, Workforce and Regulated Industries Committee would have had to issue a report on the bill by March 15, 2013. Since the Committee did not act on the bill before the deadline, Bill 506 has stalled in Committee for the 2013 legislative session. The bill remains viable and can be acted on when the Committee reconvenes for the 2014 legislative session. If the Committee acts on the bill in 2014, it must then pass votes in both the House of Representatives and the Senate and be signed by the Governor in order to become law.

It remains unclear whether Bill 506 will make it any further along the legislative process in 2014. Many Minnesota companies, particularly in the medical device and imaging fields, are expected to lobby against the bill. That opposition, combined with the fact that Minnesota courts are historically receptive to enforcing non-compete agreements in many circumstances, makes for an uphill battle for Bill 506.

Conclusion
Employers and employees should be mindful of Bill 506’s progress through the legislative process in 2014. If passed, the bill will significantly alter the legal landscape for non-compete agreements in the State of Minnesota. Please view our prior article on Minnesota House Bill 506 for a more detailed discussion of what it would mean for Minnesota businesses and employees. If you have questions regarding the legality of non-compete agreements in the State of Minnesota, please contact one of the Minnesota employment law attorneys at Trepanier MacGillis Battina P.A.
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About the Author:
Minnesota non-compete attorney Craig W. Trepanier regularly represents Minnesota employers and employees in drafting, interpreting, and litigating non-compete agreements, non-solicitation agreements, and claims involving unfair competition and misappropriation of trade secrets. If you are wondering how this new bill may impact you or your business, please contact him at 612.455.0502 or craig@trepanierlaw.com. Trepanier MacGillis Battina P.A. is a Minnesota non-compete law firm located in Minneapolis, Minnesota.
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