{ "type": "practice-guide", "canonical": "https://openagreements.org/practice-guides/non-compete/us/cnmi", "links": [ { "rel": "self", "href": "https://openagreements.org/practice-guides/non-compete/us/cnmi.json", "type": "application/json" }, { "rel": "alternate", "href": "https://openagreements.org/practice-guides/non-compete/us/cnmi", "type": "text/html" }, { "rel": "alternate", "href": "https://openagreements.org/practice-guides/non-compete/us/cnmi/markdown", "type": "text/markdown" }, { "rel": "alternate", "href": "https://openagreements.org/practice-guides/non-compete/us/cnmi/json", "type": "application/json" } ], "data": { "topic": "non-compete", "state": "cnmi", "frontmatter": { "title": "Non-Competes in the Northern Mariana Islands", "description": "The CNMI has no non-compete statute; post-employment covenants are enforceable only if they are reasonable under Restatement (Second) of Contracts § 188, which the rules-of-decision statute 7 CMC § 3401 imports as Commonwealth law, and the one on-point decision denied a preliminary injunction against two former medical-transport employees on Saipan.", "state": "Northern Mariana Islands", "lastReviewed": "2026-06-03", "license": "CC BY 4.0", "authors": [ "steven-obiajulu" ], "summary": { "enforceability": "reasonable", "bottomLine": "The CNMI has no non-compete statute; a post-employment covenant is enforceable only if reasonable under Restatement (Second) of Contracts § 188, which 7 CMC § 3401 imports as Commonwealth law, and the one on-point federal order denied an injunction in a small-island healthcare context.", "keyLaw": "7 CMC § 3401 (importing Restatement (Second) of Contracts § 188); August Healthcare Grp., LLC v. Manglona", "exceptions": "No statutory carve-outs; small-island public-interest and hardship factors weigh heavily against healthcare/specialist covenants", "courtNarrowing": "unsettled", "appliesToContractors": "unclear", "extendedForBreach": "Silent — rely on an explicit tolling clause kept within § 188 reasonableness", "maxLength": "No statutory limit", "noticeRequirement": "None", "incomeThreshold": "None", "saleOfBusiness": "Not addressed", "customerNonSolicit": "Customer non-solicit restraining competition gets § 188 reasonableness review", "employeeNonSolicit": "Not addressed" }, "about": [ "CNMI non-compete agreements", "Northern Mariana Islands restrictive covenants", "7 CMC section 3401 rules of decision", "Restatement (Second) of Contracts section 188", "August Healthcare Group v. Manglona", "CNMI non-compete consideration", "CNMI non-compete reformation", "CNMI non-compete tolling" ], "translations": [ { "language": "中文", "status": "planned" }, { "language": "Español", "status": "planned" }, { "language": "Tagalog", "status": "planned" } ] }, "questions": [ { "slug": "employee-non-compete-enforceability", "label": "Are employee non-competes enforceable?", "heading": "Are employee non-compete agreements enforceable in the CNMI?", "answerText": "Sometimes. The Commonwealth of the Northern Mariana Islands has no statute that governs non-competes. When local written law is silent, the Commonwealth's rules-of-decision statute makes the Restatements the rules of decision, so a post-employment covenant is enforceable only if it is reasonable under Restatement (Second) of Contracts § 188.", "sources": [ { "id": "cmc-3401", "authorityType": "primary-law", "tier": "primary-source-backed", "title": "7 CMC § 3401", "citation": "7 CMC § 3401.", "url": "https://cnmilaw.org/pdf/cmc_section/T7/3401.pdf", "proposition": "7 CMC § 3401 makes the common law as expressed in the Restatements the rules of decision in CNMI courts in the absence of written law or local customary law to the contrary.", "verbatimQuote": "In all proceedings, the rules of the common law, as expressed in the restatements of the law approved by the American Law Institute and, to the extent not so expressed as generally understood and applied in the United States, shall be the rules of decision in the courts of the Commonwealth, in the absence of written law or local customary law to the contrary", "anchor": "https://openagreements.org/practice-guides/non-compete/us/cnmi#src-cmc-3401" }, { "id": "aug-no-statute", "authorityType": "case-law", "tier": "primary-source-backed", "title": "August Healthcare Group, LLC v. Manglona", "citation": "August Healthcare Grp., LLC v. Manglona, No. 1:12-cv-00008, 2012 WL 12926085 (D. N. Mar. I. Oct. 12, 2012).", "url": "https://www.govinfo.gov/app/details/USCOURTS-nmid-1_12-cv-00008", "proposition": "August Healthcare holds that there is no CNMI statute, regulation, or custom governing covenants not to compete, so the enforceability analysis routes through the Restatements.", "verbatimQuote": "There is no specific law, statute, or custom in the CNMI governing covenants not to compete.", "date": "2012-10-12", "anchor": "https://openagreements.org/practice-guides/non-compete/us/cnmi#src-aug-no-statute" }, { "id": "aug-restatements", "authorityType": "case-law", "tier": "primary-source-backed", "title": "August Healthcare Group, LLC v. Manglona", "citation": "August Healthcare Grp., LLC v. Manglona, No. 1:12-cv-00008, 2012 WL 12926085 (D. N. Mar. I. Oct. 12, 2012).", "url": "https://www.govinfo.gov/app/details/USCOURTS-nmid-1_12-cv-00008", "proposition": "August Healthcare holds that, absent local written or customary law, the CNMI looks to the United States common law as expressed in the Restatements.", "verbatimQuote": "In the absence of written law or local customary law, the CNMI looks to the United States common law as expressed in the Restatements.", "date": "2012-10-12", "anchor": "https://openagreements.org/practice-guides/non-compete/us/cnmi#src-aug-restatements" } ] }, { "slug": "reasonableness-test", "label": "What test must a covenant satisfy?", "heading": "What test must a CNMI non-compete satisfy?", "answerText": "The Restatement (Second) of Contracts § 188 rule of reason. A covenant is unreasonable, and unenforceable, if it is greater than is needed to protect a legitimate employer interest, or if that need is outweighed by the hardship to the employee and the likely injury to the public.", "sources": [ { "id": "aug-188", "authorityType": "case-law", "tier": "primary-source-backed", "title": "August Healthcare Group, LLC v. Manglona", "citation": "August Healthcare Grp., LLC v. Manglona, No. 1:12-cv-00008, 2012 WL 12926085 (D. N. Mar. I. Oct. 12, 2012).", "url": "https://www.govinfo.gov/app/details/USCOURTS-nmid-1_12-cv-00008", "proposition": "August Healthcare applies Restatement (Second) of Contracts § 188 as the rule of decision for the covenant before it: a restraint is unreasonable if it is greater than needed to protect the employer's legitimate interest, or if that need is outweighed by hardship to the employee and injury to the public.", "verbatimQuote": "A promise to refrain from competition that imposes a restraint that is ancillary to an otherwise valid transaction or relationship is unreasonably in restraint of trade if (a) the restraint is greater than is needed to protect the promisee's legitimate interest, or (b) the promisee's need is outweighed by the hardship to the promisor and the likely injury to the public.", "date": "2012-10-12", "anchor": "https://openagreements.org/practice-guides/non-compete/us/cnmi#src-aug-188" } ] }, { "slug": "consideration", "label": "What consideration is required?", "heading": "What consideration supports a CNMI non-compete?", "answerText": "This is unsettled. The only CNMI covenant decision expressly declined to decide whether continued employment alone is sufficient consideration for a non-compete, so no CNMI authority answers the question.", "sources": [ { "id": "aug-saves", "authorityType": "case-law", "tier": "primary-source-backed", "title": "August Healthcare Group, LLC v. Manglona", "citation": "August Healthcare Grp., LLC v. Manglona, No. 1:12-cv-00008, 2012 WL 12926085 (D. N. Mar. I. Oct. 12, 2012).", "url": "https://www.govinfo.gov/app/details/USCOURTS-nmid-1_12-cv-00008", "proposition": "August Healthcare expressly declines to decide whether continued employment is sufficient consideration for a CNMI non-compete, leaving the issue open.", "verbatimQuote": "At this stage of the proceedings, this Court finds that the application of Section 188 of the Restatement is sufficient to address St. Michael's request for a preliminary injunction and saves the issue of consideration for another day.", "date": "2012-10-12", "anchor": "https://openagreements.org/practice-guides/non-compete/us/cnmi#src-aug-saves" } ] }, { "slug": "court-narrowing", "label": "Will courts narrow an overbroad covenant?", "heading": "Will CNMI courts narrow an overbroad non-compete?", "answerText": "There is no direct CNMI authority. Whether a Commonwealth court would blue-pencil or equitably reform an overbroad employment covenant, rather than void it, is a question of first impression.", "sources": [ { "id": "pang-gapfill", "authorityType": "case-law", "tier": "primary-source-backed", "title": "Pangelinan v. Pangelinan", "citation": "Pangelinan v. Pangelinan, 2024 MP 5.", "url": "https://www.courtlistener.com/opinion/10124676/pangelinan-v-pangelinan/", "deepLink": "https://www.courtlistener.com/opinion/10124676/pangelinan-v-pangelinan/#:~:text=first%20look%20to%20local%20written,the%20Restatement%20fills%20the%20gaps.", "proposition": "Pangelinan describes the 7 CMC § 3401 cascade: CNMI courts first look to local written law and, where it is lacking, the Restatement fills the gaps, the route by which Restatement reformation principles would reach an employment covenant.", "verbatimQuote": "first look to local written law, which includes our case law adopting and/or adapting Restatement provisions. To the extent local written law is lacking, the Restatement fills the gaps.", "date": "2024-09-23", "anchor": "https://openagreements.org/practice-guides/non-compete/us/cnmi#src-pang-gapfill" } ] }, { "slug": "trade-secrets-nonsolicit", "label": "How are NDAs and customer lists treated?", "heading": "How does the CNMI treat NDAs, non-solicits, and customer lists?", "answerText": "It depends on the restraint. A non-solicitation covenant restrains competition and is judged by the same Restatement § 188 reasonableness standard as a non-compete. Confidentiality and trade-secret protection instead run through common-law trade-secret principles: in August Healthcare the court analyzed the employer's customer list under common-law trade-secret factors and found it was not necessarily a protectable trade secret, because Saipan is a small market where the relevant customers are readily observable.", "sources": [ { "id": "aug-customer-list", "authorityType": "case-law", "tier": "primary-source-backed", "title": "August Healthcare Group, LLC v. Manglona", "citation": "August Healthcare Grp., LLC v. Manglona, No. 1:12-cv-00008, 2012 WL 12926085 (D. N. Mar. I. Oct. 12, 2012).", "url": "https://www.govinfo.gov/app/details/USCOURTS-nmid-1_12-cv-00008", "proposition": "August Healthcare reasons that on Saipan the names of those needing the employer's services would be public knowledge, undercutting the claim that the customer list is a protectable trade secret.", "verbatimQuote": "While a customer list and data can be considered trade secrets, Defendants make a convincing argument that Saipan is such a small community that the names of those needing healthcare transportation services would be public knowledge.", "date": "2012-10-12", "anchor": "https://openagreements.org/practice-guides/non-compete/us/cnmi#src-aug-customer-list" }, { "id": "aug-not-trade-secret", "authorityType": "case-law", "tier": "primary-source-backed", "title": "August Healthcare Group, LLC v. Manglona", "citation": "August Healthcare Grp., LLC v. Manglona, No. 1:12-cv-00008, 2012 WL 12926085 (D. N. Mar. I. Oct. 12, 2012).", "url": "https://www.govinfo.gov/app/details/USCOURTS-nmid-1_12-cv-00008", "proposition": "August Healthcare concludes that the employer's customer list is not necessarily a trade secret in the industry, so the employer failed to show a protectable interest warranting preliminary injunctive relief.", "verbatimQuote": "Therefore, the list of customers is not necessarily a trade secret in the industry.", "date": "2012-10-12", "anchor": "https://openagreements.org/practice-guides/non-compete/us/cnmi#src-aug-not-trade-secret" } ] }, { "slug": "healthcare-public-interest", "label": "Are healthcare and specialist covenants harder?", "heading": "Are healthcare and specialist non-competes harder to enforce?", "answerText": "Likely, though the law is thin. The only CNMI covenant decision shows both limbs of § 188 — the hardship to the employee and the injury to the public — weighing heavily against enforcement in a small island economy. In August Healthcare the court declined to preliminarily enjoin two former emergency medical-transport employees from joining a competitor, finding there were no other private medical providers on Saipan and that an injunction would deprive them of their livelihood.", "sources": [ { "id": "aug-no-providers", "authorityType": "case-law", "tier": "primary-source-backed", "title": "August Healthcare Group, LLC v. Manglona", "citation": "August Healthcare Grp., LLC v. Manglona, No. 1:12-cv-00008, 2012 WL 12926085 (D. N. Mar. I. Oct. 12, 2012).", "url": "https://www.govinfo.gov/app/details/USCOURTS-nmid-1_12-cv-00008", "proposition": "August Healthcare denies an injunction in part because there were no other private medical service providers on Saipan, so enjoining the paramedics would harm the public and impose extreme hardship on the employees.", "verbatimQuote": "There are no other private medical service providers on Saipan to hire employees with their specialized skills.", "date": "2012-10-12", "anchor": "https://openagreements.org/practice-guides/non-compete/us/cnmi#src-aug-no-providers" }, { "id": "aug-deprive", "authorityType": "case-law", "tier": "primary-source-backed", "title": "August Healthcare Group, LLC v. Manglona", "citation": "August Healthcare Grp., LLC v. Manglona, No. 1:12-cv-00008, 2012 WL 12926085 (D. N. Mar. I. Oct. 12, 2012).", "url": "https://www.govinfo.gov/app/details/USCOURTS-nmid-1_12-cv-00008", "proposition": "August Healthcare reasons that an injunction barring the paramedics from the competitor would deprive them of their livelihood in a highly specialized health-care sector on Saipan.", "verbatimQuote": "An injunction that bars Pelisamen and Takai from working for Priority Care would deprive the men of the ability to earn their livelihood in a highly specialized sector of health care on Saipan.", "date": "2012-10-12", "anchor": "https://openagreements.org/practice-guides/non-compete/us/cnmi#src-aug-deprive" }, { "id": "aug-extraordinary", "authorityType": "case-law", "tier": "primary-source-backed", "title": "August Healthcare Group, LLC v. Manglona", "citation": "August Healthcare Grp., LLC v. Manglona, No. 1:12-cv-00008, 2012 WL 12926085 (D. N. Mar. I. Oct. 12, 2012).", "url": "https://www.govinfo.gov/app/details/USCOURTS-nmid-1_12-cv-00008", "proposition": "August Healthcare states that a preliminary injunction is an extraordinary remedy never awarded as of right.", "verbatimQuote": "A preliminary injunction is an extraordinary remedy never awarded as of right.", "date": "2012-10-12", "anchor": "https://openagreements.org/practice-guides/non-compete/us/cnmi#src-aug-extraordinary" }, { "id": "aug-four-prong", "authorityType": "case-law", "tier": "primary-source-backed", "title": "August Healthcare Group, LLC v. Manglona", "citation": "August Healthcare Grp., LLC v. Manglona, No. 1:12-cv-00008, 2012 WL 12926085 (D. N. Mar. I. Oct. 12, 2012).", "url": "https://www.govinfo.gov/app/details/USCOURTS-nmid-1_12-cv-00008", "proposition": "August Healthcare applies the four-factor preliminary-injunction test: likelihood of success, irreparable harm, the balance of equities, and the public interest.", "verbatimQuote": "The plaintiff must establish that (1) plaintiff is likely to succeed on the merits, (2) plaintiff is likely to suffer irreparable harm in the absence of a preliminary injunction, (3) the balance of equities tips in plaintiff's favor, and (4) a preliminary injunction is in the public interest.", "date": "2012-10-12", "anchor": "https://openagreements.org/practice-guides/non-compete/us/cnmi#src-aug-four-prong" } ] }, { "slug": "extended-for-breach", "label": "Does the period toll during breach?", "heading": "Does the restricted period toll or extend if the employee breaches?", "answerText": "CNMI primary law is silent. No Commonwealth statute or decision approves or rejects pausing or extending a non-compete during a period of breach or pending litigation, so the question is genuinely open. A contractual tolling clause is the safer route, but any extension must still leave the total restraint reasonable under § 188.", "sources": [ { "id": "emc-tolling", "authorityType": "case-law", "tier": "primary-source-backed", "title": "EMC Corp. v. Arturi", "citation": "EMC Corp. v. Arturi, 655 F.3d 75 (1st Cir. 2011).", "url": "https://www.courtlistener.com/opinion/612666/emc-corp-v-arturi/", "deepLink": "https://www.courtlistener.com/opinion/612666/emc-corp-v-arturi/#:~:text=Being%20forewarned%2C%20EMC%20could%20have,upon%20preliminary%20finding%20of%20breach.", "proposition": "EMC v. Arturi, applying Massachusetts law, declines to equitably extend a non-compete after its term expired and notes the employer could have contracted for tolling during litigation. It is persuasive authority only, not CNMI law.", "verbatimQuote": "Being forewarned, EMC could have contracted, as the district judge noted, for tolling the term of the restriction during litigation, or for a period of restriction to commence upon preliminary finding of breach.", "date": "2011-08-26", "anchor": "https://openagreements.org/practice-guides/non-compete/us/cnmi#src-emc-tolling" }, { "id": "tolling-188", "authorityType": "case-law", "tier": "primary-source-backed", "title": "August Healthcare Group, LLC v. Manglona", "citation": "August Healthcare Grp., LLC v. Manglona, No. 1:12-cv-00008, 2012 WL 12926085 (D. N. Mar. I. Oct. 12, 2012).", "url": "https://www.govinfo.gov/app/details/USCOURTS-nmid-1_12-cv-00008", "proposition": "Because § 188 governs in the CNMI, a tolling clause that extends the effective restraint past a reasonable duration risks making the covenant unenforceable as greater than needed to protect the employer.", "verbatimQuote": "A promise to refrain from competition that imposes a restraint that is ancillary to an otherwise valid transaction or relationship is unreasonably in restraint of trade if (a) the restraint is greater than is needed to protect the promisee's legitimate interest, or (b) the promisee's need is outweighed by the hardship to the promisor and the likely injury to the public.", "date": "2012-10-12", "anchor": "https://openagreements.org/practice-guides/non-compete/us/cnmi#src-tolling-188" } ] }, { "slug": "recent-developments", "label": "What recent changes matter?", "heading": "What recent developments should employers monitor?", "answerText": "As of June 3, 2026, the framework is stable. No CNMI statute has displaced the analysis that runs from 7 CMC § 3401 to Restatement § 188, and the CNMI Supreme Court reaffirmed that the Restatements are the Commonwealth's rules of decision in 2024.", "sources": [ { "id": "pang-current", "authorityType": "case-law", "tier": "primary-source-backed", "title": "Pangelinan v. Pangelinan", "citation": "Pangelinan v. Pangelinan, 2024 MP 5.", "url": "https://www.courtlistener.com/opinion/10124676/pangelinan-v-pangelinan/", "deepLink": "https://www.courtlistener.com/opinion/10124676/pangelinan-v-pangelinan/#:~:text=shall%20be%20the%20rules%20of,customary%20law%20to%20the%20contrary.", "proposition": "Pangelinan v. Pangelinan (2024) reaffirms that 7 CMC § 3401 makes the Restatements the rules of decision in CNMI courts, confirming the governing framework remains current law.", "verbatimQuote": "shall be the rules of decision in the courts of the Commonwealth, in the absence of written law or local customary law to the contrary.", "date": "2024-09-23", "anchor": "https://openagreements.org/practice-guides/non-compete/us/cnmi#src-pang-current" } ] } ] } }