Are Non-Competes Enforceable in North Dakota? Your Rights Explained

In North Dakota, non-compete agreements that stop an employee from working in their profession, trade, or business are void and unenforceable. North Dakota Century Code section 9-08-06 states that “every contract by which anyone is restrained from exercising a lawful profession, trade, or business of any kind is to that extent void,” with only two narrow statutory exceptions (the sale of business goodwill and the dissolution of a partnership or limited liability company). This makes North Dakota one of a small handful of states—alongside California, Oklahoma, and, for most workers, Minnesota—where ordinary employee non-competes simply cannot be enforced. If your employer asked you to sign a covenant not to compete after you leave the job, that clause is generally unenforceable in North Dakota courts no matter how “reasonable” it looks.

North Dakota’s Rule: A Near-Total Ban on Employee Non-Competes

Unlike most states, North Dakota does not apply a “reasonableness” test that lets courts enforce a non-compete if its geographic scope and time limit are deemed fair. North Dakota law begins from the opposite premise: the restraint is void to the extent it stops you from earning a living in your field. Courts in North Dakota have consistently refused to rewrite or “blue-pencil” an overbroad non-compete to make it enforceable. In states that allow blue-penciling, a judge might trim an unreasonable five-year, nationwide restriction down to something narrower. North Dakota judges generally will not do that—if the clause restrains your lawful trade, it falls within the statutory prohibition.

The North Dakota Supreme Court has interpreted section 9-08-06 strictly. The statute does not turn on whether you are highly paid or low-wage, whether you had access to trade secrets, or whether you signed voluntarily. Because the prohibition is built into statute rather than left to case-by-case balancing, the protection applies broadly across industries and wage levels. That is the core difference between North Dakota and the roughly forty states that permit “reasonable” non-competes.

The Two Statutory Exceptions

North Dakota recognizes only two situations where a contract can lawfully restrain someone from competing:

• Sale of a business and its goodwill. Under N.D. Cent. Code section 9-08-06(1), someone who sells the goodwill of a business may agree with the buyer to refrain from carrying on a similar business within a specified geographic area, so long as the buyer or its successor continues to operate a like business there. This protects the value the buyer paid for.
• Dissolution of a partnership or LLC. Under section 9-08-06(2), partners or members may, upon or in anticipation of dissolution, agree that some or all of them will not carry on a similar business within a specified area.

Notice what is missing from this list: the ordinary employer-employee relationship. An employer cannot fit a routine employment non-compete into the “sale of goodwill” exception just by inserting that language into a hiring packet. Courts look at the substance of the transaction, not the label.

What Employers Can Still Do

The ban on non-competes does not leave North Dakota employers without protection. Several related tools remain available and are commonly enforced:

• Confidentiality and trade-secret agreements. North Dakota has adopted the Uniform Trade Secrets Act (N.D. Cent. Code chapter 47-25.1). An employer can require you to keep genuine trade secrets and confidential information private even after you leave. These are different from non-competes—they restrict what you can disclose or use, not whether you can work for a competitor.
• Non-solicitation provisions. Agreements barring you from soliciting your former employer’s customers or employees occupy a grayer area. Some are challenged as disguised non-competes; their enforceability depends on how broadly they are written and whether they effectively restrain your trade.
• Non-disclosure of customer lists. Where a customer list qualifies as a protectable trade secret, misappropriating it can give rise to liability separate from any non-compete.

If you sign a document labeled “confidentiality agreement” but its real effect is to stop you from working in your field, a North Dakota court can treat it as the void non-compete it actually is.

Recent Developments: State and Federal

North Dakota’s statutory ban is long-standing and has not been weakened; the protection for workers remains strong as of 2026. On the federal side, the Federal Trade Commission issued a rule in 2024 that sought to ban most non-competes nationwide, but that rule was blocked by a federal court and did not take effect. For North Dakota workers this federal back-and-forth changes little—state law already provides broader protection than the proposed federal rule would have. Whatever happens federally, section 9-08-06 continues to void employee non-competes in North Dakota.

There is no separate North Dakota carve-out that bans non-competes only for “low-wage” workers, the way some states (such as those with income-threshold rules) do. North Dakota does not need a wage threshold because its ban already reaches employees at every pay level.

How This Compares to Federal Wage Baselines

Non-compete law is governed by state contract law, not by the federal Fair Labor Standards Act. The FLSA sets a federal minimum wage of $7.25 per hour and requires overtime at one and one-half times your regular rate for hours over 40 in a workweek, but it says nothing about whether you can be barred from competing. North Dakota’s minimum wage tracks the federal $7.25 figure as of 2026; confirm the current rate with North Dakota Job Service before relying on it. The point is that your right to leave a job and work for a competitor in North Dakota comes from state contract law—specifically section 9-08-06—not from federal wage statutes.

What to Do If You Are Asked to Sign or Threatened With a Non-Compete

If an employer presents you with a non-compete in North Dakota:

• Read it, but know it is likely void. Signing does not make an unenforceable restraint enforceable. That said, get the full document and keep a copy.
• Separate the clauses. Identify whether the agreement also contains confidentiality, trade-secret, or non-solicitation terms, which may be enforceable even though the pure non-compete is not.
• Do not be intimidated by a threat letter. Former employers sometimes send cease-and-desist letters citing a non-compete. In North Dakota these threats often rest on a clause that a court would void. Do not quit a new job based on the letter alone.
• Document everything. Save offer letters, the signed agreement, and any communications threatening enforcement.
• Get advice before acting. Because non-solicitation and trade-secret claims can survive even where the non-compete fails, talk to a North Dakota employment attorney before changing jobs if a written restriction exists. Many offer free initial consultations.

Where to Verify

The controlling text is North Dakota Century Code section 9-08-06, which you can read on the North Dakota Legislative Branch website. For wage and hour questions, contact Job Service North Dakota and the North Dakota Department of Labor and Human Rights, the state agencies that handle employment standards and worker rights. For a binding answer about your specific contract, consult a licensed North Dakota attorney, because how a particular confidentiality or non-solicitation clause is written can change the outcome even though the underlying non-compete ban is clear.

Official North Dakota Sources

This page is based on North Dakota employment law. Rules and figures change — verify the current details directly with the official North Dakota sources below. This is general legal information, not legal advice.

• North Dakota Department of Labor and Human Rights — official North Dakota agency.
• Submit a Wage Claim - ND Department of Labor and Human Rights
• North Dakota Century Code Title 34 - Labor and Employment

Federal law and local ordinances may also apply. Federal laws like the Fair Labor Standards Act set a national floor, and your city or county may add protections (such as a higher local minimum wage or paid sick leave). Check both alongside North Dakota state law.