Non-Compete Agreements in North Dakota
Written in plain language for general understanding. This is educational content, not legal advice. Content is researched from federal statutes, state codes, and official government sources. Each article is reviewed for accuracy before publication. Our editorial process
What is this right?
A non-compete agreement is a contract clause that restricts you from working for a competitor or starting a competing business after you leave your employer. These agreements are common in tech, sales, healthcare, and executive positions — but they are increasingly controversial and several states have banned or severely limited them.
There is no single federal law governing non-competes. The FTC proposed a nationwide ban in 2024, but a federal court struck it down (Ryan LLC v. FTC, N.D. Tex., August 2024). Whether your non-compete is enforceable depends almost entirely on your state's law. Some states (California, Minnesota, North Dakota, Oklahoma) ban them outright. Others enforce them only if they are "reasonable" in duration, geographic scope, and the activities restricted.
When does it apply?
This issue applies when:
- Your employer asks you to sign a non-compete as a condition of employment or continued employment
- You are leaving a job and your former employer claims you cannot work for a competitor
- You want to start a business in the same industry as your current or former employer
Factors courts consider when enforcing non-competes:
- Duration: Most courts consider 6 months to 2 years reasonable. Anything beyond 2 years is harder to enforce.
- Geographic scope: Must be limited to areas where the employer actually does business. Nationwide restrictions are often struck down unless the employer operates nationally.
- Scope of activities: Must be narrowly tailored to protect legitimate business interests (trade secrets, client relationships) — not just prevent competition generally.
- Consideration: In many states, continued employment alone is not sufficient consideration for a non-compete signed after you were already hired. You may need additional compensation or benefits.
Common misconceptions:
- "I signed it, so it must be enforceable" — Many non-competes are overly broad and unenforceable. Courts frequently refuse to enforce them or narrow their scope.
- "Non-competes are illegal now" — The FTC's proposed ban was blocked in court. Non-competes remain legal in most states, though the trend is toward restricting them.
- "My employer can stop me from earning a living" — Courts balance employer interests against your right to work. An agreement that effectively prevents you from working in your field is less likely to be enforced.
What to Do If You Signed a Non-Compete
Step 1: Read the agreement carefully before signing. Note the duration, geographic scope, and what activities are restricted. If it seems overly broad, negotiate — employers often agree to narrow the terms.
Step 2: Check your state's law. If you are in California, Minnesota, North Dakota, or Oklahoma, non-competes are generally void. Several other states (Colorado, Illinois, Oregon, Washington) ban them for workers below certain income thresholds.
Step 3: If you have already signed and want to leave, consult an employment attorney before your last day. An attorney can assess whether the agreement is enforceable in your state and advise on how to proceed.
Step 4: If your former employer threatens legal action, do not panic. Many employers use non-competes as a scare tactic but never actually sue. However, take any cease-and-desist letter seriously and get legal advice.
Step 5: Document any evidence that the non-compete lacks consideration (e.g., you were asked to sign it years after being hired with nothing in return) or that it is broader than necessary to protect legitimate business interests.
What should you NOT do?
Don't assume a non-compete is unenforceable without checking. While many are overly broad, some states enforce them strictly. Get a legal opinion specific to your state and situation.
Don't sign without reading. Non-competes are often buried in broader employment agreements. Know what you are agreeing to before you sign.
Don't ignore a lawsuit or cease-and-desist letter. Even if you believe the non-compete is invalid, failing to respond to legal action can result in a default judgment against you.
Don't take trade secrets or client lists with you. Even if the non-compete itself is unenforceable, misappropriating trade secrets is a separate legal violation under the federal Defend Trade Secrets Act (18 U.S.C. § 1836) and state laws.
How North Dakota differs from federal law
North Dakota is one of only four states that ban non-compete agreements:
- NDCC § 9-08-06: Declares that every contract restraining anyone from exercising a lawful profession, trade, or business is void. This is one of the broadest non-compete bans in the country, similar to California's.
- Narrow exceptions: Non-compete agreements are enforceable only in connection with the sale of a business or the dissolution of a partnership. Employment non-competes have no exceptions in North Dakota.
- Out-of-state non-competes: Even if you signed a non-compete in another state, North Dakota courts will not enforce it against you while you work in North Dakota. The state's strong public policy against restraints on trade takes precedence.
- Non-solicitation agreements: While non-compete clauses are void, courts have sometimes enforced narrowly tailored non-solicitation agreements that do not prevent the employee from working in their field but only from soliciting specific clients.
- Trade secret protections: Employers can still protect trade secrets and confidential information through nondisclosure agreements (NDAs) and under the North Dakota Uniform Trade Secrets Act (NDCC § 47-25.1).
Additional Steps in North Dakota
If an employer attempts to enforce a non-compete against you in North Dakota, consult an employment attorney. State Bar of North Dakota: (701) 255-1404. File complaints with the North Dakota Department of Labor at (701) 328-2660.
Relevant Law: NDCC § 9-08-06 (non-compete ban). NDCC § 47-25.1 (Uniform Trade Secrets Act).
Common Questions
When does non-compete agreements apply?
This issue applies when:Your employer asks you to sign a non-compete as a condition of employment or continued employmentYou are leaving a job and your former employer claims you cannot work for a competitorYou want to start a business in the same industry as your current or former employerFactors courts consider when enforcing non-competes:Duration: Most courts consider 6 months to 2 years reasonable. Anything beyond 2 years is harder to enforce.Geographic scope: Must be limited to areas where the employer actually does business. Nationwide restrictions are often struck down unless the employ...
What should I do if my employer is trying to enforce a non-compete agreement?
Step 1: Read the agreement carefully before signing. Note the duration, geographic scope, and what activities are restricted. If it seems overly broad, negotiate — employers often agree to narrow the terms.Step 2: Check your state's law. If you are in California, Minnesota, North Dakota, or Oklahoma, non-competes are generally void. Several other states (Colorado, Illinois, Oregon, Washington) ban them for workers below certain income thresholds.Step 3: If you have already signed and want to leave, consult an employment attorney before your last day. An attorney can assess whether the agreemen...
What mistakes should I avoid with non-compete agreements?
Don't assume a non-compete is unenforceable without checking. While many are overly broad, some states enforce them strictly. Get a legal opinion specific to your state and situation.Don't sign without reading. Non-competes are often buried in broader employment agreements. Know what you are agreeing to before you sign.Don't ignore a lawsuit or cease-and-desist letter. Even if you believe the non-compete is invalid, failing to respond to legal action can result in a default judgment against you.Don't take trade secrets or client lists with you. Even if the non-compete itself is unenforceable,...
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