MN Lawmakers expect newly adopted non-compete ban to have big impact

Credit: MGN
Credit: MGN(MGN)
Published: Jul. 12, 2023 at 2:54 AM CDT
Email This Link
Share on Pinterest
Share on LinkedIn

ST. PAUL, Minn. (GRAY) – On July 1st, Minnesota joined the ranks of 4 other states (North Dakota, Oklahoma, California) in banning non-compete clauses. The bill was one of many included in the 2023 Omnibus Jobs and Labor Bill, and prevents entities in the state from enforcing non-complete clauses, rendering them effectively void.

The law does not apply to clauses that were already in effect before July 1.

The DFL pushed hard to make the bill a reality. Leading the charge in the Senate was Sen. Alice Mann (DFL - Edina).

“I think non-competes, after all the research that I did, are very harmful to the economy as a whole,” said Mann, “They hamper innovation. They push people out of their communities, which is a really big deal. And they sometimes even induce workers to leave their occupations entirely. So we forego accumulated training and experience in those fields.”

Mann wasn’t alone in her convictions. The bill got widespread support from members of her own party.

The newly passed law isn’t so popular with some members of the business community, though.

The Minnesota Broadcaster’s Association, for instance, pushed hard to prevent non-compete clauses from being banned in 2023. President Wendy Paulson explained that non-compete clauses have always been a standard part of the industry.

“With this new law going into effect July 1, it’s going to mean that many of the broadcasters are just going to have to realign how they’re doing things with their talent,” Paulson said.

For Paulson and other opponents of the legislation, one of the main arguments involves the amount of money sunk into new employees and new talent.

“Everybody’s trying to get the eyeballs of the consumers to be watching their product. And so they put in a lot of time and effort into promoting their personalities,” she said.

Mann believes that on the contrary, the bill will help certain areas maintain talent that might otherwise be lost.

“Why shouldn’t that person be allowed to leave? You can always put in place things like, ’If I invest [a certain] amount of money into this person, they have to work here for five years. And if they don’t, they have to pay back that investment,’” said Mann, “You can still do that. But to prevent someone from working after they leave, that should be illegal.”

The Federal Trade Commission is also considering a ban on non-competes at the federal level.