Important Tips for Business Buyers and Sellers—Employers and Employees

Joel Fremstad-Defeats Motions for Temporary Injunctions in Non-Compete Cases

 Fremstad Law founder Joel Fremstad has recently defeated two separate efforts to obtain temporary injunctions against his clients.

In one case in Minnesota, Joel’s client was a business seller who agreed to remain on with the buyer as an employee.  Disputes arose and the buyer/employer sought a temporary injunction to prevent the seller/employee from competing. Joel defeated the injunction motion and the parties eventually settled their dispute.

In another recent case , this time in North Dakota, Joel’s client was again a business seller, but one that had not sold all of his business.  The buyer brought a motion for a temporary injunction and once again Joel prevailed by defeating the injunction motion.

These cases, being in two different states, illustrate a number of important issues for business buyers and sellers, as well as employers and employees.

In Minnesota non-competition and non-solicitation agreements between a business seller and a business buyer will generally be enforceable to the extent that they are reasonable.  This is also true in the case of Minnesota employers desiring to have Minnesota employees sign non-compete and non-competition agreements. As a general rule, however, if a Minnesota employee is not first selling his or her business, what is reasonable to enforce against the employee will be more limited.

In North Dakota non-competition and non-solicitation agreements between a business seller and a business buyer can also be enforced, but only as to one county or city.  Non-compete and non-solicit agreements between an employer and employer, where there is no sale of the business involved, are not enforceable in North Dakota as such have been declared against the State’s public policy.

At Fremstad Law, attorney Joel Fremstad works with business buyers and business sellers as well as with employers and employees on issues relating to restrictive covenants and other business and employment issues.  They assist clients with the purchase and sale of businesses, with drafting employment agreements, with addressing the enforceability of restrictive covenants and the protection of trade secrets and confidential information, and when necessary can initiate or defend litigation involving these and related issues.  As with so many issues, Fremstad Law encourages clients to be proactive with these issues and not wait until problems arise.

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