{ "type": "practice-guide", "canonical": "https://openagreements.org/practice-guides/non-compete/us/north-dakota", "links": [ { "rel": "self", "href": "https://openagreements.org/practice-guides/non-compete/us/north-dakota.json", "type": "application/json" }, { "rel": "alternate", "href": "https://openagreements.org/practice-guides/non-compete/us/north-dakota", "type": "text/html" }, { "rel": "alternate", "href": "https://openagreements.org/practice-guides/non-compete/us/north-dakota/markdown", "type": "text/markdown" }, { "rel": "alternate", "href": "https://openagreements.org/practice-guides/non-compete/us/north-dakota/json", "type": "application/json" } ], "data": { "topic": "non-compete", "state": "north-dakota", "frontmatter": { "title": "Non-Competes in North Dakota", "description": "North Dakota voids employee non-competes under N.D. Cent. Code § 9-08-06, one of the strictest bans in the United States, with only sale-of-goodwill and dissociation exceptions.", "state": "North Dakota", "lastReviewed": "2026-06-02", "license": "CC BY 4.0", "authors": [ "steven-obiajulu" ], "summary": { "enforceability": "banned", "bottomLine": "North Dakota voids employee non-competes by statute, with exceptions only for sale-of-goodwill and owner dissolution or dissociation covenants.", "keyLaw": "N.D. Cent. Code § 9-08-06", "exceptions": "Sale of business goodwill; owner dissolution/dissociation; narrow employee anti-raiding non-solicits (Warner); customer non-solicits void", "courtNarrowing": "no", "appliesToContractors": "unclear", "extendedForBreach": "Not addressed by statute", "maxLength": "No statutory limit for the ban", "noticeRequirement": "None", "incomeThreshold": "None", "saleOfBusiness": "Allowed only with sale of goodwill", "customerNonSolicit": "Void if it restrains business", "employeeNonSolicit": "Narrow anti-raiding can be enforceable" }, "about": [ "North Dakota non-compete agreements", "North Dakota restrictive covenants", "N.D. Cent. Code § 9-08-06", "North Dakota employee non-competes", "North Dakota physician non-competes", "North Dakota sale-of-business non-competes", "North Dakota customer non-solicitation", "North Dakota trade secrets" ], "translations": [ { "language": "中文", "status": "planned" }, { "language": "Español", "status": "planned" }, { "language": "Português", "status": "planned" }, { "language": "Deutsch", "status": "planned" } ], "relatedForm": { "slug": "openagreements-restrictive-covenant-north-dakota" } }, "questions": [ { "slug": "employee-non-compete-enforceability", "label": "Are employee non-competes enforceable in North Dakota?", "heading": "Are employee non-compete agreements enforceable in North Dakota?", "answerText": "No. North Dakota law makes a contract that restrains a lawful profession, trade, or business to that extent void.", "sources": [ { "id": "north-dakota-business-restraint-void", "authorityType": "primary-law", "tier": "primary-source-backed", "title": "N.D. Cent. Code § 9-08-06", "citation": "N.D. Cent. Code § 9-08-06.", "url": "https://ndlegis.gov/cencode/t09c08.pdf", "proposition": "N.D. Cent. Code § 9-08-06 supplies North Dakota's baseline rule voiding contracts that restrain a lawful profession, trade, or business except for listed statutory exceptions.", "verbatimQuote": "A contract by which anyone is restrained from exercising a lawful profession, trade, or business of any kind is to that extent void, except: 1. A person that sells the goodwill of a business and the person's partners, members, or shareholders may agree with the buyer to refrain from carrying on a similar business within a reasonable geographic area and for a reasonable length of time, if the buyer or any person deriving title to the goodwill from the buyer carries on a like business in that area.", "anchor": "https://openagreements.org/practice-guides/non-compete/us/north-dakota#src-north-dakota-business-restraint-void" }, { "id": "werlinger-employee-noncompete-void", "authorityType": "case-law", "tier": "primary-source-backed", "title": "Werlinger v. Mutual Service Casualty Insurance Co.", "citation": "Werlinger v. Mut. Serv. Cas. Ins. Co., 496 N.W.2d 26, 27 (N.D. 1993).", "url": "https://www.courtlistener.com/opinion/1282430/werlinger-v-mutual-service-casualty-insurance-co/", "deepLink": "https://www.courtlistener.com/opinion/1282430/werlinger-v-mutual-service-casualty-insurance-co/#:~:text=The%20trial%20court%20ruled%20that,unenforceable%20under%20%C2%A7%209%2D08%2D06%2C%20N.D.C.C.", "proposition": "Werlinger supports the rule that an employment non-compete against an insurance agent is void under § 9-08-06.", "verbatimQuote": "The trial court ruled that Paragraph 12(D) was a restraint of trade, void and unenforceable under § 9-08-06, N.D.C.C.", "date": "1993-02-23", "anchor": "https://openagreements.org/practice-guides/non-compete/us/north-dakota#src-werlinger-employee-noncompete-void" }, { "id": "spectrum-physician-employment-void", "authorityType": "case-law", "tier": "primary-source-backed", "title": "Spectrum Emergency Care, Inc. v. St. Joseph's Hospital & Health Center", "citation": "Spectrum Emergency Care, Inc. v. St. Joseph's Hosp. & Health Ctr., 479 N.W.2d 848, 851 (N.D. 1992).", "url": "https://www.courtlistener.com/opinion/1229922/spectrum-emergency-care-inc-v-st-josephs-hospital-health-center/", "deepLink": "https://www.courtlistener.com/opinion/1229922/spectrum-emergency-care-inc-v-st-josephs-hospital-health-center/#:~:text=There%20can%20be%20no%20doubt,the%20contract%20period%20with%20Spectrum.", "proposition": "Spectrum supports applying § 9-08-06 to physician employment restraints.", "verbatimQuote": "There can be no doubt that section 9-08-06, N.D.C.C., makes void the provision which attempts to prohibit the physicians from being employed by the Hospital at the end of the contract period with Spectrum.", "date": "1992-01-14", "anchor": "https://openagreements.org/practice-guides/non-compete/us/north-dakota#src-spectrum-physician-employment-void" } ] }, { "slug": "statutory-exceptions", "label": "What statutory exceptions permit North Dakota non-competes?", "heading": "What statutory exceptions permit North Dakota non-competes?", "answerText": "Only two categories are built into § 9-08-06: sale of business goodwill and certain owner dissociation or dissolution covenants.", "sources": [ { "id": "north-dakota-goodwill-exception", "authorityType": "primary-law", "tier": "primary-source-backed", "title": "N.D. Cent. Code § 9-08-06", "citation": "N.D. Cent. Code § 9-08-06.", "url": "https://ndlegis.gov/cencode/t09c08.pdf", "proposition": "N.D. Cent. Code § 9-08-06 carves out only two exceptions to the business-restraint ban — sale of goodwill and owner dissolution or dissociation — each requiring a reasonable geographic area and a reasonable length of time.", "verbatimQuote": "A contract by which anyone is restrained from exercising a lawful profession, trade, or business of any kind is to that extent void, except: 1. A person that sells the goodwill of a business and the person's partners, members, or shareholders may agree with the buyer to refrain from carrying on a similar business within a reasonable geographic area and for a reasonable length of time, if the buyer or any person deriving title to the goodwill from the buyer carries on a like business in that area. 2. Partners, members, or shareholders, upon or in anticipation of a dissolution of a partnership, limited liability company, or corporation; upon or in anticipation of a dissociation of a partner or member; or as part of an agreement addressing the dissociation or sale of a partner, member, or shareholder's ownership interest, may agree that all or any number of them will not carry on a similar business within a reasonable geographic area where the partnership, limited liability company, or corporation business has been transacted, or within a specified part of the area.", "anchor": "https://openagreements.org/practice-guides/non-compete/us/north-dakota#src-north-dakota-goodwill-exception" }, { "id": "north-dakota-goodwill-transfer", "authorityType": "primary-law", "tier": "primary-source-backed", "title": "N.D. Cent. Code §§ 47-07-10 to -12", "citation": "N.D. Cent. Code § 47-07-11.", "url": "https://ndlegis.gov/cencode/t47c07.pdf", "proposition": "N.D. Cent. Code chapter 47-07 defines goodwill, makes it transferable, and attaches a customer non-diversion warranty to a goodwill sale.", "verbatimQuote": "The goodwill of a business is property transferable in the same manner as any other.", "anchor": "https://openagreements.org/practice-guides/non-compete/us/north-dakota#src-north-dakota-goodwill-transfer" }, { "id": "earthworks-goodwill-connection", "authorityType": "case-law", "tier": "primary-source-backed", "title": "Earthworks, Inc. v. Sehn", "citation": "Earthworks, Inc. v. Sehn, 553 N.W.2d 490, 493 (N.D. 1996).", "url": "https://www.courtlistener.com/opinion/895669/earthworks-inc-v-sehn/", "deepLink": "https://www.courtlistener.com/opinion/895669/earthworks-inc-v-sehn/#:~:text=The%20exception%20relied%20on%20here,the%20goodwill%20of%20a%20business.", "proposition": "Earthworks supports the rule that the sale-of-goodwill exception validates only limited non-competes connected with goodwill.", "verbatimQuote": "The exception relied on here by Earthworks makes valid a limited non-competition agreement only if it is connected with the sale of the goodwill of a business.", "date": "1996-09-03", "anchor": "https://openagreements.org/practice-guides/non-compete/us/north-dakota#src-earthworks-goodwill-connection" }, { "id": "warner-small-stock-goodwill", "authorityType": "case-law", "tier": "primary-source-backed", "title": "Warner & Co. v. Solberg", "citation": "Warner & Co. v. Solberg, 2001 ND 156, ¶ 29, 634 N.W.2d 65.", "url": "https://www.courtlistener.com/opinion/896854/warner-co-v-solberg/", "deepLink": "https://www.courtlistener.com/opinion/896854/warner-co-v-solberg/#:~:text=We%20agree%20with%20the%20trial,the%20goodwill%20of%20the%20business.", "proposition": "Warner supports scrutinizing whether an equity sale is sufficient to qualify as a sale of goodwill.", "verbatimQuote": "We agree with the trial court that, as a matter of law, the sale of a l/200th interest cannot be said to transfer the goodwill of the business.", "date": "2001-09-05", "anchor": "https://openagreements.org/practice-guides/non-compete/us/north-dakota#src-warner-small-stock-goodwill" } ] }, { "slug": "court-narrowing", "label": "Do North Dakota courts blue-pencil an overbroad non-compete?", "heading": "Do North Dakota courts blue-pencil an overbroad non-compete?", "answerText": "Usually no for employee non-competes. Section 9-08-06 makes the restraint to that extent void, so courts strike the invalid restraint rather than save it through a general reasonableness rewrite.", "sources": [ { "id": "north-dakota-red-pencil-text", "authorityType": "primary-law", "tier": "primary-source-backed", "title": "N.D. Cent. Code § 9-08-06", "citation": "N.D. Cent. Code § 9-08-06.", "url": "https://ndlegis.gov/cencode/t09c08.pdf", "proposition": "N.D. Cent. Code § 9-08-06 uses voiding language rather than a general reasonableness standard for covered restraints.", "verbatimQuote": "A contract by which anyone is restrained from exercising a lawful profession, trade, or business of any kind is to that extent void, except: 1. A person that sells the goodwill of a business and the person's partners, members, or shareholders may agree with the buyer to refrain from carrying on a similar business within a reasonable geographic area and for a reasonable length of time, if the buyer or any person deriving title to the goodwill from the buyer carries on a like business in that area.", "anchor": "https://openagreements.org/practice-guides/non-compete/us/north-dakota#src-north-dakota-red-pencil-text" }, { "id": "hawkins-sale-covenant-severability", "authorityType": "case-law", "tier": "primary-source-backed", "title": "Hawkins Chemical, Inc. v. McNea", "citation": "Hawkins Chem., Inc. v. McNea, 321 N.W.2d 918, 920 (N.D. 1982).", "url": "https://www.courtlistener.com/opinion/1586088/hawkins-chemical-inc-v-mcnea/", "deepLink": "https://www.courtlistener.com/opinion/1586088/hawkins-chemical-inc-v-mcnea/#:~:text=Because%20the%20property%20and%20business,be%20enforceable%20in%20that%20county.", "proposition": "Hawkins supports partial enforcement in a sale-of-business setting where an overbroad covenant can be confined to the valid county.", "verbatimQuote": "Because the property and business purchased from Saunders and McNea were located and conducted in Ward County, we hold the non-competition agreement to be enforceable in that county.", "date": "1982-07-09", "anchor": "https://openagreements.org/practice-guides/non-compete/us/north-dakota#src-hawkins-sale-covenant-severability" }, { "id": "warner-replacement-clause-void", "authorityType": "case-law", "tier": "primary-source-backed", "title": "Warner & Co. v. Solberg", "citation": "Warner & Co. v. Solberg, 2001 ND 156, ¶ 24, 634 N.W.2d 65.", "url": "https://www.courtlistener.com/opinion/896854/warner-co-v-solberg/", "deepLink": "https://www.courtlistener.com/opinion/896854/warner-co-v-solberg/#:~:text=These%20limitations%20constitute%20a%20restraint,is%20%E2%80%9Cto%20that%20extent%20void.%E2%80%9D", "proposition": "Warner supports striking customer-replacement restraints in employment agreements as void to that extent.", "verbatimQuote": "These limitations constitute a restraint of trade and therefore the agreement is “to that extent void.”", "date": "2001-09-05", "anchor": "https://openagreements.org/practice-guides/non-compete/us/north-dakota#src-warner-replacement-clause-void" } ] }, { "slug": "choice-of-law-forum", "label": "Can an out-of-state employer use choice-of-law or forum-selection clauses?", "heading": "Can an out-of-state employer use a choice-of-law or forum-selection clause to enforce a North Dakota non-compete?", "answerText": "No, not when the practical result is enforcement of a non-compete against North Dakota work in violation of North Dakota public policy.", "sources": [ { "id": "osborne-choice-forum-unenforceable", "authorityType": "case-law", "tier": "primary-source-backed", "title": "Osborne v. Brown & Saenger, Inc.", "citation": "Osborne v. Brown & Saenger, Inc., 2017 ND 288, ¶ 16, 904 N.W.2d 34.", "url": "https://www.courtlistener.com/opinion/4449595/osborne-v-brown-saenger-inc/", "deepLink": "https://www.courtlistener.com/opinion/4449595/osborne-v-brown-saenger-inc/#:~:text=Simply%20put%2C%20one%20may%20not,public%20policy%20against%20non%2Dcompete%20agreements.", "proposition": "Osborne supports refusing choice-of-law and forum-selection clauses that would enable enforcement of a non-compete contrary to North Dakota public policy.", "verbatimQuote": "Simply put, one may not contract for application of another state’s law or forum if the natural result is to allow enforcement of a non-compete agreement in violation of North Dakota’s longstanding and strong public policy against non-compete agreements.", "date": "2017-12-07", "anchor": "https://openagreements.org/practice-guides/non-compete/us/north-dakota#src-osborne-choice-forum-unenforceable" }, { "id": "north-dakota-foreign-forum-unreasonable", "authorityType": "primary-law", "tier": "primary-source-backed", "title": "N.D. Cent. Code § 28-04.1-03", "citation": "N.D. Cent. Code § 28-04.1-03.", "url": "https://ndlegis.gov/cencode/t28c04-1.pdf", "proposition": "N.D. Cent. Code § 28-04.1-03 allows a North Dakota court to decline enforcement of an exclusive foreign-forum agreement when enforcement would be unfair or unreasonable.", "verbatimQuote": "If the parties have agreed in writing that an action on a controversy may be brought only in another state and it is brought in a court of this state, the court will dismiss or stay the action, as appropriate, unless: 1. The court is required by statute to entertain the action; 2. The plaintiff cannot secure effective relief in the other state, for reasons other than delay in bringing the action; 3. The other state would be a substantially less convenient place for the trial of the action than this state; 4. The agreement as to the place of the action was obtained by misrepresentation, duress, the abuse of economic power, or other unconscionable means; or 5. It would for some other reason be unfair or unreasonable to enforce the agreement.", "anchor": "https://openagreements.org/practice-guides/non-compete/us/north-dakota#src-north-dakota-foreign-forum-unreasonable" } ] }, { "slug": "customer-nonsolicits", "label": "Are customer non-solicitation covenants enforceable in North Dakota?", "heading": "Are customer non-solicitation covenants enforceable in North Dakota?", "answerText": "Usually no. North Dakota treats post-employment customer non-solicitation and customer-replacement clauses as restraints on trade when they restrict the worker's lawful business.", "sources": [ { "id": "warner-customer-restriction-void", "authorityType": "case-law", "tier": "primary-source-backed", "title": "Warner & Co. v. Solberg", "citation": "Warner & Co. v. Solberg, 2001 ND 156, ¶ 23, 634 N.W.2d 65.", "url": "https://www.courtlistener.com/opinion/896854/warner-co-v-solberg/", "deepLink": "https://www.courtlistener.com/opinion/896854/warner-co-v-solberg/#:~:text=The%20statute%20contains%20no%20exception,and%20(b)%20of%20the%20contract.", "proposition": "Warner supports the rule that post-employment customer solicitation and replacement restrictions are void under § 9-08-06.", "verbatimQuote": "The statute contains no exception for the contractual provisions in § 6(a) and (b) of the contract.", "date": "2001-09-05", "anchor": "https://openagreements.org/practice-guides/non-compete/us/north-dakota#src-warner-customer-restriction-void" }, { "id": "warner-trade-secret-rationale", "authorityType": "case-law", "tier": "primary-source-backed", "title": "Warner & Co. v. Solberg", "citation": "Warner & Co. v. Solberg, 2001 ND 156, ¶ 18, 634 N.W.2d 65.", "url": "https://www.courtlistener.com/opinion/896854/warner-co-v-solberg/", "deepLink": "https://www.courtlistener.com/opinion/896854/warner-co-v-solberg/#:~:text=Because%20of%20the%20plain%20language,we%20decline%20to%20do%20so.", "proposition": "Warner supports using trade-secret law rather than a judicial exception to § 9-08-06 to protect confidential customer information.", "verbatimQuote": "Because of the plain language of the statute, the history of legislation in North Dakota concerning this issue, and because North Dakota has enacted trade-secrets legislation, we decline to do so.", "date": "2001-09-05", "anchor": "https://openagreements.org/practice-guides/non-compete/us/north-dakota#src-warner-trade-secret-rationale" } ] }, { "slug": "employee-nonsolicits", "label": "Are employee or anti-raiding non-solicits enforceable in North Dakota?", "heading": "Are employee or anti-raiding non-solicits enforceable in North Dakota?", "answerText": "A narrow anti-raiding covenant can be enforceable. Warner upheld the possibility of a clause barring a former agent from soliciting or influencing another employee to leave for the new agency.", "sources": [ { "id": "warner-employee-nonsolicit-not-void", "authorityType": "case-law", "tier": "primary-source-backed", "title": "Warner & Co. v. Solberg", "citation": "Warner & Co. v. Solberg, 2001 ND 156, ¶ 25, 634 N.W.2d 65.", "url": "https://www.courtlistener.com/opinion/896854/warner-co-v-solberg/", "deepLink": "https://www.courtlistener.com/opinion/896854/warner-co-v-solberg/#:~:text=This%20prohibition%20is%20narrowly%20drawn,as%20a%20restraint%20of%20trade.", "proposition": "Warner supports that a narrowly drawn employee non-solicitation covenant is not void under § 9-08-06, though enforcement still depends on ordinary proof and remedies.", "verbatimQuote": "This prohibition is narrowly drawn to penalize only Solberg’s actions of soliciting or influencing an employee to leave Warner and come to work for Vaaler and is not void as a restraint of trade.", "date": "2001-09-05", "anchor": "https://openagreements.org/practice-guides/non-compete/us/north-dakota#src-warner-employee-nonsolicit-not-void" }, { "id": "pruco-no-clear-solicitation", "authorityType": "case-law", "tier": "primary-source-backed", "title": "Pruco Securities Corp. v. Montgomery", "citation": "Pruco Sec. Corp. v. Montgomery, 264 F. Supp. 2d 862, 868 (D.N.D. 2003).", "url": "https://www.courtlistener.com/opinion/2507357/pruco-securities-corp-v-montgomery/", "deepLink": "https://www.courtlistener.com/opinion/2507357/pruco-securities-corp-v-montgomery/#:~:text=Simply%20stated%2C%20the%20record%20at,follow%20him%20to%20Minnesota%20Life.", "proposition": "Pruco supports requiring proof of solicitation before enforcing anti-raiding restrictions by injunction.", "verbatimQuote": "Simply stated, the record at this stage is devoid of any competent evidence that Montgomery improperly solicited Prudential agents to follow him to Minnesota Life.", "date": "2003-05-22", "anchor": "https://openagreements.org/practice-guides/non-compete/us/north-dakota#src-pruco-no-clear-solicitation" }, { "id": "biever-during-employment-solicitation", "authorityType": "case-law", "tier": "primary-source-backed", "title": "Biever, Drees & Nordell v. Coutts", "citation": "Biever, Drees & Nordell v. Coutts, 305 N.W.2d 33, 36 (N.D. 1981).", "url": "https://www.courtlistener.com/opinion/2226690/biever-drees-nordell-v-coutts/", "deepLink": "https://www.courtlistener.com/opinion/2226690/biever-drees-nordell-v-coutts/#:~:text=We%20believe%20the%20above%20provision,was%20employed%20by%20the%20firm.", "proposition": "Biever supports equitable relief for secret solicitation of an employer's clients while still employed.", "verbatimQuote": "We believe the above provision clearly sets forth what the firm had a right to expect from Coutts, i. e., that he would not solicit clients of the firm for himself while he was employed by the firm.", "date": "1981-04-23", "anchor": "https://openagreements.org/practice-guides/non-compete/us/north-dakota#src-biever-during-employment-solicitation" } ] }, { "slug": "forfeiture-for-competition", "label": "Are forfeiture-for-competition clauses enforceable in North Dakota?", "heading": "Are forfeiture-for-competition clauses enforceable in North Dakota?", "answerText": "No, if the forfeiture operates as an indirect restraint on lawful post-employment competition. Werlinger rejected the idea that a worker can be made to buy the freedom to compete.", "sources": [ { "id": "werlinger-restraint-not-absolute", "authorityType": "case-law", "tier": "primary-source-backed", "title": "Werlinger v. Mutual Service Casualty Insurance Co.", "citation": "Werlinger v. Mut. Serv. Cas. Ins. Co., 496 N.W.2d 26, 29 (N.D. 1993).", "url": "https://www.courtlistener.com/opinion/1282430/werlinger-v-mutual-service-casualty-insurance-co/", "deepLink": "https://www.courtlistener.com/opinion/1282430/werlinger-v-mutual-service-casualty-insurance-co/#:~:text=Surely%20this%20was%20not%20freedom,no%20merit%20to%20this%20contention.", "proposition": "Werlinger supports the rule that a restraint need not be absolute to be void under § 9-08-06.", "verbatimQuote": "Surely this was not freedom to practice his profession in Grand Forks, since he would have to purchase the freedom with $2,000, and there is no merit to this contention.", "date": "1993-02-23", "anchor": "https://openagreements.org/practice-guides/non-compete/us/north-dakota#src-werlinger-restraint-not-absolute" }, { "id": "earthworks-penalty-restraint", "authorityType": "case-law", "tier": "primary-source-backed", "title": "Earthworks, Inc. v. Sehn", "citation": "Earthworks, Inc. v. Sehn, 553 N.W.2d 490, 493 (N.D. 1996).", "url": "https://www.courtlistener.com/opinion/895669/earthworks-inc-v-sehn/", "deepLink": "https://www.courtlistener.com/opinion/895669/earthworks-inc-v-sehn/#:~:text=The%20statute%20represents%20one%20of,penalty%20if%20he%20does%20so.", "proposition": "Earthworks supports treating post-employment competitor bans and competition penalties as invalid under § 9-08-06 outside an exception.", "verbatimQuote": "The statute represents one of the oldest and most continuous applications of public policy in contract law, and it invalidates provisions in employment contracts prohibiting an employee from working for a competitor after completion of his employment or imposing a penalty if he does so.", "date": "1996-09-03", "anchor": "https://openagreements.org/practice-guides/non-compete/us/north-dakota#src-earthworks-penalty-restraint" } ] }, { "slug": "physician-healthcare-noncompetes", "label": "How are physician and healthcare non-competes treated in North Dakota?", "heading": "How are physician and healthcare non-competes treated in North Dakota?", "answerText": "Section 9-08-06 applies to physician and healthcare restraints. Spectrum voided restraints that blocked physicians from future hospital employment and contracting.", "sources": [ { "id": "spectrum-physician-negotiation-protected", "authorityType": "case-law", "tier": "primary-source-backed", "title": "Spectrum Emergency Care, Inc. v. St. Joseph's Hospital & Health Center", "citation": "Spectrum Emergency Care, Inc. v. St. Joseph's Hosp. & Health Ctr., 479 N.W.2d 848, 851 (N.D. 1992).", "url": "https://www.courtlistener.com/opinion/1229922/spectrum-emergency-care-inc-v-st-josephs-hospital-health-center/", "deepLink": "https://www.courtlistener.com/opinion/1229922/spectrum-emergency-care-inc-v-st-josephs-hospital-health-center/#:~:text=The%20ability%20to%20negotiate%20and,lawful%20profession%2C%20trade%2C%20or%20business.", "proposition": "Spectrum supports applying § 9-08-06 to protect physicians' future employment negotiations and contracts.", "verbatimQuote": "The ability to negotiate and contract for future employment is central to one's ability to exercise a lawful profession, trade, or business.", "date": "1992-01-14", "anchor": "https://openagreements.org/practice-guides/non-compete/us/north-dakota#src-spectrum-physician-negotiation-protected" }, { "id": "physician-independent-judgment", "authorityType": "primary-law", "tier": "primary-source-backed", "title": "N.D. Cent. Code § 43-17-42", "citation": "N.D. Cent. Code § 43-17-42.", "url": "https://ndlegis.gov/cencode/t43c17.pdf", "proposition": "N.D. Cent. Code § 43-17-42 permits certain hospital and nonprofit physician employment contracts while preserving independent medical judgment.", "verbatimQuote": "The written contract must contain language to the effect the employment relationship with the physician may not affect the exercise of the physician's independent judgment in the practice of medicine, and the physician's independent judgment in the practice of medicine is in fact unaffected by the physician's employment relationship with the hospital, nonprofit entity, or charitable trust.", "anchor": "https://openagreements.org/practice-guides/non-compete/us/north-dakota#src-physician-independent-judgment" } ] }, { "slug": "amendment-effects", "label": "How did the 2019 amendment change North Dakota non-compete law?", "heading": "How did the 2019 amendment change North Dakota non-compete law?", "answerText": "The current statute frames both exceptions around a reasonable geographic area and a reasonable length of time, and expressly covers partners, members, and shareholders in goodwill sales and in owner dissolution or dissociation.", "sources": [ { "id": "north-dakota-current-owner-exceptions", "authorityType": "primary-law", "tier": "primary-source-backed", "title": "N.D. Cent. Code § 9-08-06", "citation": "N.D. Cent. Code § 9-08-06.", "url": "https://ndlegis.gov/cencode/t09c08.pdf", "proposition": "Current N.D. Cent. Code § 9-08-06 frames both exceptions — sale of goodwill and owner dissolution or dissociation — around a reasonable geographic area and a reasonable length of time, and expressly names partners, members, and shareholders.", "verbatimQuote": "A contract by which anyone is restrained from exercising a lawful profession, trade, or business of any kind is to that extent void, except: 1. A person that sells the goodwill of a business and the person's partners, members, or shareholders may agree with the buyer to refrain from carrying on a similar business within a reasonable geographic area and for a reasonable length of time, if the buyer or any person deriving title to the goodwill from the buyer carries on a like business in that area. 2. Partners, members, or shareholders, upon or in anticipation of a dissolution of a partnership, limited liability company, or corporation; upon or in anticipation of a dissociation of a partner or member; or as part of an agreement addressing the dissociation or sale of a partner, member, or shareholder's ownership interest, may agree that all or any number of them will not carry on a similar business within a reasonable geographic area where the partnership, limited liability company, or corporation business has been transacted, or within a specified part of the area.", "anchor": "https://openagreements.org/practice-guides/non-compete/us/north-dakota#src-north-dakota-current-owner-exceptions" } ] }, { "slug": "employer-alternatives", "label": "What alternatives do North Dakota employers have?", "heading": "What alternatives do North Dakota employers have?", "answerText": "Employers should use trade-secret, confidentiality, invention-assignment, return-of-property, and during-employment loyalty tools instead of post-employment competition bans.", "sources": [ { "id": "north-dakota-trade-secret-injunction", "authorityType": "primary-law", "tier": "primary-source-backed", "title": "N.D. Cent. Code ch. 47-25.1", "citation": "N.D. Cent. Code § 47-25.1-02(1).", "url": "https://ndlegis.gov/cencode/t47c25-1.pdf", "proposition": "North Dakota's Uniform Trade Secrets Act authorizes injunctions for actual or threatened misappropriation.", "verbatimQuote": "Actual or threatened misappropriation may be enjoined.", "anchor": "https://openagreements.org/practice-guides/non-compete/us/north-dakota#src-north-dakota-trade-secret-injunction" }, { "id": "north-dakota-trade-secret-definition", "authorityType": "primary-law", "tier": "primary-source-backed", "title": "N.D. Cent. Code ch. 47-25.1", "citation": "N.D. Cent. Code § 47-25.1-01(4).", "url": "https://ndlegis.gov/cencode/t47c25-1.pdf", "proposition": "North Dakota's Uniform Trade Secrets Act defines trade secret by economic value from secrecy and reasonable efforts to maintain secrecy.", "verbatimQuote": "4. \"Trade secret\" means information, including a formula, pattern, compilation, program, device, method, technique, or process, that: a. Derives independent economic value, actual or potential, from not being generally known to, and not being readily ascertainable by proper means by, other persons who can obtain economic value from its disclosure or use; and b. Is the subject of efforts that are reasonable under the circumstances to maintain its secrecy.", "anchor": "https://openagreements.org/practice-guides/non-compete/us/north-dakota#src-north-dakota-trade-secret-definition" }, { "id": "north-dakota-trade-secret-damages", "authorityType": "primary-law", "tier": "primary-source-backed", "title": "N.D. Cent. Code ch. 47-25.1", "citation": "N.D. Cent. Code § 47-25.1-03(1).", "url": "https://ndlegis.gov/cencode/t47c25-1.pdf", "proposition": "North Dakota's Uniform Trade Secrets Act authorizes damages for misappropriation, including actual loss and unjust enrichment.", "verbatimQuote": "Damages can include both the actual loss caused by misappropriation and the unjust enrichment caused by misappropriation that is not taken into account in computing actual loss.", "anchor": "https://openagreements.org/practice-guides/non-compete/us/north-dakota#src-north-dakota-trade-secret-damages" }, { "id": "north-dakota-loyalty-duty", "authorityType": "primary-law", "tier": "primary-source-backed", "title": "N.D. Cent. Code § 34-02-14", "citation": "N.D. Cent. Code § 34-02-14.", "url": "https://ndlegis.gov/cencode/t34c02.pdf", "proposition": "N.D. Cent. Code § 34-02-14 supplies a during-employment duty to prefer the employer's business in similar affairs.", "verbatimQuote": "An employee who has any business to transact on the employee's own account similar to that entrusted to the employee by the employee's employer shall give the latter the preference always.", "anchor": "https://openagreements.org/practice-guides/non-compete/us/north-dakota#src-north-dakota-loyalty-duty" } ] } ] } }