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Minnesota Non-Disclosure Agreement Requirements

Minnesota Statutes Section 181.988 defines a void covenant not to compete narrowly: only a covenant agreed to during the sale of a business or in anticipation of a business's dissolution survives the law's July 1, 2023 effective date, and a court can award attorney fees to an employee who has to enforce the ban.

Introduction

Minnesota Statutes Section 181.988 defines a void covenant not to compete narrowly: only a covenant agreed to during the sale of a business or in anticipation of a business's dissolution survives the law's July 1, 2023 effective date, and a court can award attorney fees to an employee who has to enforce the ban. Minnesota Non-Disclosure Agreements operate against that backdrop, one of the strongest employee noncompete bans in the country, but the ban does not reach an ordinary Minnesota NDA. Section 181.988 expressly excludes a nondisclosure agreement, or agreement designed to protect trade secrets or confidential information, from its definition of a covenant not to compete, so a properly scoped confidentiality agreement stays enforceable. A Minnesota NDA is otherwise an ordinary contract in which one or both parties agree to keep specified information confidential, mutual or one-way. Trade secrets shared under the agreement are protected separately under the Minnesota Uniform Trade Secrets Act (Minnesota Statutes Sections 325C.01 through 325C.08), and a misappropriation claim generally must be filed within three years of when the misappropriation was discovered or reasonably should have been. Minnesota is also one of the states with an employee invention-assignment carve-out: under Minnesota Statutes Section 181.78, an NDA or employment agreement cannot require an employee to assign an invention developed entirely on their own time without the employer's equipment, supplies, facilities, or trade secret information, unless the invention relates to the employer's business, and the employer must give the employee written notice of that limit.

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Key Things to Know

  1. 1

    Minnesota is also one of the states with an employee invention-assignment carve-out. Under Minnesota Statutes Section 181.78, an NDA or employment agreement cannot require an employee to assign an invention developed entirely on their own time without the employer's equipment, supplies, facilities, or trade secret information, unless the invention relates to the employer's business, and the employer must give the employee written notice of that limit.

  2. 2

    Minnesota Statutes Section 181.988, effective July 1, 2023, voids nearly all employee noncompete agreements outright, one of the strongest bans in the country, but the statute expressly excludes a nondisclosure agreement, or agreement designed to protect trade secrets or confidential information, from its definition of a covenant not to compete.

  3. 3

    The only covenants not to compete that remain valid under Section 181.988 are ones agreed to during the sale of a business or in anticipation of a business's dissolution; every other employment noncompete entered into on or after July 1, 2023 is void and unenforceable, and a court can award attorney fees to an employee enforcing the ban.

  4. 4

    Trade secret protection runs through the Minnesota Uniform Trade Secrets Act (Minnesota Statutes Sections 325C.01 through 325C.08), separate from whatever the NDA itself says.

  5. 5

    A trade secret misappropriation claim in Minnesota generally must be filed within three years of when the misappropriation was discovered or reasonably should have been discovered, and a continuing misappropriation counts as a single claim (Minnesota Statutes Section 325C.06).

  6. 6

    Mutual NDAs, where both sides share confidential information, and one-way NDAs, where only one side does, are both ordinary enforceable contracts in Minnesota; which one fits depends on whether the exchange runs both directions, like a partnership or acquisition discussion, or one direction, like pitching an investor.

  7. 7

    A Minnesota court can order injunctive relief to stop an ongoing or threatened breach of a valid NDA, in addition to any damages the disclosure caused.

Key decisions before you file

Before you file a Non-Disclosure Agreement in Minnesota, a few decisions shape the document: which option to choose and what each one means. The Non-Disclosure Agreement guide walks through them.

Open the Non-Disclosure Agreement guide

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MINNESOTA NON-DISCLOSURE AGREEMENT

This Non-Disclosure Agreement is entered into by [Party A Name] of [City], Minnesota and [Party B Name] of [City], Minnesota (individually a "Party" and together the "Parties").

  1. Purpose. The Parties anticipate [describe business purpose, e.g. exploring a potential business relationship], which may require one or both to share Confidential Information with the other.

  2. Definition of Confidential Information. Under the Minnesota Uniform Trade Secrets Act, Minnesota Statutes Section 325C.01, a trade secret derives independent economic value from not being generally known and is kept secret through reasonable efforts. "Confidential Information" means any such trade secret plus other nonpublic business, technical, or financial information disclosed under circumstances signaling confidentiality; it excludes information already public, already known to the receiving Party, independently developed, or rightfully received from a third party without a confidentiality duty.

  3. Obligations. Passing Confidential Information along to anyone outside the receiving Party's own organization takes the disclosing Party's advance written approval. Inside that organization, access stays limited to employees or advisors who need the information for the Section 1 purpose and who are themselves committed to confidentiality terms as strict as this Agreement, and the receiving Party must otherwise apply reasonable care to protect what it has been given.

  4. Scope Limitation (Minnesota-Specific). Minnesota Statutes Section 181.988, effective July 1, 2023, voids nearly every employee covenant not to compete signed in this state, one of the broadest bans of its kind nationally, with exceptions reserved only for a covenant tied to a business sale or a business's dissolution. That statute defines "covenant not to compete" to exclude a nondisclosure agreement, or any agreement designed to protect trade secrets or confidential information, from its own reach, so this Agreement is not the kind of contract Section 181.988 voids so long as its confidentiality definition stays within Section 2 above, never restricting where a Party or its employees may work afterward, what profession they may pursue, or their general skill, knowledge, and experience.

  5. Invention Assignment (Minnesota-Specific). If this Agreement or an accompanying employment agreement asks an employee to assign inventions to an employer, Minnesota Statutes Section 181.78 caps that obligation: it does not reach an invention developed entirely on the employee's own time, without the employer's equipment, supplies, facilities, or trade secret information, unless the invention relates to the employer's business or research, or grew out of work the employee performed for the employer. A provision reaching further is void against Minnesota public policy, and Section 181.78 separately requires written notice of this limit whenever an assignment obligation appears in the agreement.

  6. Federal Whistleblower Notice. Reporting or helping investigate a suspected violation of law does not expose someone to trade secret liability under the Defend Trade Secrets Act, 18 U.S.C. Section 1833(b), so long as the trade secret goes only to a government official or a lawyer, in confidence, for that purpose; the same immunity extends to a trade secret filed with a court under seal. This section states that immunity here because a party seeking the Act's exemplary damages and fee-shifting remedies against an employee, contractor, or consultant loses access to them without giving this notice.

  7. Term. This Agreement's confidentiality duties expire [X years] after signing for ordinary Confidential Information, but not for a trade secret under Minnesota law, which the Minnesota Uniform Trade Secrets Act protects for as long as it keeps meeting that Act's definition, however long that turns out to be.

  8. Return or Destruction. Confidential Information does not stay with the receiving Party indefinitely: every copy it holds gets returned or destroyed, and the destruction confirmed, as soon as the disclosing Party asks for that or the Section 1 purpose runs its course, whichever happens first.

  9. Remedies. Minnesota Statutes Section 325C.02 lets a court enjoin actual or threatened trade secret misappropriation, sought under Minnesota Rule of Civil Procedure 65, alongside damages; a breach falling short of trade secret status carries ordinary contract remedies instead.

  10. Governing Law. Minnesota courts weigh a contract choice-of-law question using the five choice-influencing considerations from Milkovich v. Saari, 203 N.W.2d 408 (Minn. 1973), rather than a fixed statutory rule, and the Parties agree Minnesota law governs this Agreement since Minnesota is where it is made and centered.

  11. Miscellaneous. An electronic signature binds a Party here under the Minnesota Uniform Electronic Transactions Act, Minnesota Statutes Chapter 325L, and the federal ESIGN Act, 15 U.S.C. Section 7001. This Agreement's other provisions remain binding even if a single provision turns out to be unenforceable, and each Party's promises here count as sufficient consideration for the other's.

[Party A Signature] ____________________ Date: __________ [Party B Signature] ____________________ Date: __________

Minnesota Requirements for Non-Disclosure Agreement

Minnesota Uniform Trade Secrets Act Compliance (Minnesota Statutes Section 325C.01 through 325C.08)

Requires the agreement's definition of trade secrets and remedies for misappropriation to align with the Minnesota Uniform Trade Secrets Act, which separately protects trade secrets regardless of what the NDA itself says.

Defend Trade Secrets Act Compliance (18 U.S.C. Section 1836 et seq.)

Incorporates the federal Defend Trade Secrets Act's civil cause of action for trade secret misappropriation, available alongside any state-law claim.

Definition of Confidential Information (Minnesota Statutes Section 325C.01)

Grounds the agreement's definition of confidential information in the Minnesota Uniform Trade Secrets Act's definitions section, which covers both trade secrets and other nonpublic business information.

Duration of Confidentiality Obligations (Minnesota Uniform Trade Secrets Act, Minnesota Statutes Section 325C.01 through 325C.08)

A fixed term applies to confidential information that does not rise to the level of a trade secret. Information meeting the Minnesota Uniform Trade Secrets Act's trade secret definition instead stays protected for as long as it continues to qualify as one, with no fixed end date, rather than being limited by restraint-of-trade reasoning, which governs post-employment noncompetes, not bare confidentiality duration.

Permitted Disclosures (Minnesota Rules of Civil Procedure; Federal Rules of Civil Procedure)

Allows disclosure required by law, subpoena, or court order, consistent with compelled-disclosure procedures under Minnesota and federal civil procedure rules.

Remedies for Breach (Minnesota Statutes Section 325C.02; Minnesota Rules of Civil Procedure 65)

Specifies injunctive relief as an available remedy for actual or threatened trade secret misappropriation, consistent with the Minnesota Uniform Trade Secrets Act's injunctive-relief section and the procedure for seeking an injunction under Rule 65.

Electronic Communications Privacy Act Compliance (18 U.S.C. Section 2510 et seq.)

Acknowledges federal restrictions on intercepting electronic communications, relevant when confidential information is exchanged electronically between the Parties.

Economic Espionage Act Compliance (18 U.S.C. Section 1831 et seq.)

Acknowledges federal criminal penalties for trade secret theft intended to benefit a foreign entity or harm the trade secret's owner.

Non-Solicitation Provisions (Minnesota common law on restrictive covenants; Minnesota Statutes Section 181.988)

A nonsolicitation clause survives Minnesota Statutes Section 181.988's 2023 noncompete ban, since the statute expressly excludes nonsolicitation agreements from its definition of a covenant not to compete, but the clause remains independently subject to Minnesota's common-law reasonableness test on scope and duration.

Assignment and Successors (Minnesota common law on contracts and assignments)

Addresses whether confidentiality obligations bind or benefit a Party's successors or affiliates, consistent with ordinary Minnesota contract-assignment principles.

Severability (Minnesota common law on contracts)

Preserves the remainder of the agreement if a court holds any single provision unenforceable.

Minnesota Human Rights Act Compliance (Minnesota Statutes Section 363A.31, Limitations on Waiver)

Minnesota Statutes Section 363A.31 voids any contract provision that purports to waive an individual's rights or remedies under the Minnesota Human Rights Act as to acts or practices occurring after the provision is signed, so this Agreement cannot be read to bar a report of a suspected Human Rights Act violation.

Securities Laws Compliance (Securities Act of 1933; Securities Exchange Act of 1934; Minnesota Statutes Chapter 80A)

Addresses compliance with federal and Minnesota securities law, relevant if confidential information shared under the agreement relates to investment or financial matters; Minnesota's state securities law is codified at Chapter 80A.

Data Privacy Compliance (Minnesota Statutes Section 325E.61; 15 U.S.C. Section 6801 et seq., Gramm-Leach-Bliley Act)

Addresses compliance with Minnesota's data breach notification law and the federal Gramm-Leach-Bliley Act when the confidential information includes personal or nonpublic financial data.

Consideration (Minnesota common law on contracts)

Requires the agreement be supported by adequate consideration, a bargained-for exchange of value, to be enforceable under Minnesota contract law.

Frequently Asked Questions

A Non-Disclosure Agreement in Minnesota is an ordinary contract in which one or both parties agree to keep specified information confidential. It can be mutual, where both sides share confidential information, or one-way, where only one side does. Trade secrets shared under the agreement are also separately protected by the Minnesota Uniform Trade Secrets Act (Minnesota Statutes Sections 325C.01 through 325C.08) regardless of what the NDA itself says.

Generally not, once the clause goes beyond protecting confidential information. Minnesota Statutes Section 181.988, effective July 1, 2023, voids nearly all employee noncompete agreements, but the statute expressly excludes a nondisclosure agreement, or agreement designed to protect trade secrets or confidential information, from its definition of a covenant not to compete. An NDA that genuinely protects confidential information, rather than restricting where or for whom someone can work afterward, is not the kind of agreement Section 181.988 targets.

Minnesota Statutes Section 181.988, effective July 1, 2023, made any covenant not to compete in an employment agreement void and unenforceable, with narrow exceptions only for a covenant agreed to during the sale of a business or in anticipation of a business's dissolution. It is one of the strongest state noncompete bans in the country. It leaves NDAs and trade-secret confidentiality agreements untouched, since the statute defines those terms separately and excludes them from its ban, so a Minnesota employer can still require confidentiality without running afoul of Section 181.988.

A trade secret misappropriation claim under the Minnesota Uniform Trade Secrets Act generally must be brought within three years after the misappropriation is discovered, or after it reasonably should have been discovered with reasonable diligence (Minnesota Statutes Section 325C.06). A continuing misappropriation counts as a single claim rather than a new claim each time. A separate breach-of-contract claim over the NDA itself follows Minnesota's ordinary written-contract limitations period.

No, not automatically. Minnesota Statutes Section 181.78 excludes an invention the employee developed entirely on their own time, without using the employer's equipment, supplies, facilities, or trade secret information, unless the invention relates to the employer's business or actual or demonstrably anticipated research and development, or resulted from work the employee performed for the employer. A provision in an NDA or employment agreement that tries to reach further than that is against Minnesota public policy and void and unenforceable, and the employer must give the employee written notice of this limitation when the agreement contains an assignment provision.

It depends on whether confidential information will flow in both directions or only one. A mutual NDA fits a two-way exchange, such as a merger, partnership, or joint-venture discussion where both sides disclose sensitive information. A one-way NDA fits a one-directional exchange, such as pitching a business plan to an investor who is not sharing anything confidential back. Both forms are equally enforceable in Minnesota; the choice is about which structure matches the actual relationship.

No. A Minnesota NDA is an ordinary contract, not a formal instrument like a will or power of attorney, so it does not require notarization or witnesses to be valid. It only needs the standard elements of a valid contract: an offer, acceptance, and consideration, along with signatures from the parties being bound.

The non-breaching party can seek injunctive relief to stop an ongoing or threatened disclosure, along with damages caused by the breach. If the disclosed information also qualifies as a trade secret, the Minnesota Uniform Trade Secrets Act provides an additional, independent basis for relief, including damages for actual loss and unjust enrichment, separate from whatever remedies the NDA itself specifies.