Legal Memorandum: Validity of a Non‑Compete Clause in MN

Issue: Under Minnesota law, is a non‑compete clause in a professional contract valid, and not a form of unlawful fee-splitting?

Area of Law: Business Organizations & Contracts
Keywords: Non‑compete; Validity; Fee-splitting
Jurisdiction: Minnesota 
Cited Cases: 298 N.W.2d 127; 367 N.W.2d 556; 772 N.W.2d 528
Cited Statutes: None
Date: 03/01/2012

No cases were located that held that a non-compete clause is not fee-splitting.  However, the following cases generally support the validity of reasonable non-competition clauses that are supported by valid consideration, including in some cases non-compete clauses that contain liquidated damages provisions:

Davies & Davies Agency, Inc. v. Buckingham, 298 N.W.2d 127 (Minn. 1980)

Medtronic, Inc. v. Hughes, No. A10-998 (Minn. Ct. App. Jan. 18, 2011)

C.H. Robinson Worldwide, Inc. v. FLS Transp., Inc., 772 N.W.2d 528 (Minn. Ct. App. 2009)

Potter v. Durkin, No. C5-99-1206 (Minn. Ct. App. Feb. 15, 2000)

Dean Van Horn Consulting Assocs., Inc. v. Wold, 367 N.W.2d 556 (Minn. Ct. App. 1985)


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