I want to hire someone who signed a non-compete agreement with a larger local tech company. Can I do it, or will my startup get sued?
Minnesota law allows employers to enforce these sort of contracts – sometimes called restrictive covenants – if they meet certain criteria. First, the restrictions must be reasonable in scope, including how long the restriction lasts, where it applies and the types of companies that are off limits. Second, the employee must have been given something of value for signing the agreement. This usually means the employee signed the agreement before she began employment with the other company. because these issues are a bit murky, companies often will negotiate and try to reach some sort of compromise over the employee’s planned work. This might include placing the employee in a different role at your startup for a period of time, or putting certain projects or customers off limits from the employee. Note that if you hire someone with an enforceable non-compete, the employee can be sued for violating the contract, and your startup can be sued for enticing the employee to violate the contract.
This post does not constitute legal advice and does not establish an attorney-client relationship.