As we discussed on March 18, a bill was proposed in the Minnesota House of Representatives that would void most noncompete agreements in Minnesota, including those in employment contracts. However, currently, they remain enforceable.
So, what could happen to your company if you decided to hire an employee who is bound by a noncompete or nonsolicitation agreement?
Your company could be liable for tortious interference by that employee’s former employer.
Tortious interference with contract is a legal claim that enables a contracting party to sue a third-party who knowingly interferes with and causes a breach of a contract.
Under Minnesota law, a plaintiff must prove five elements to succeed on a claim for tortious interference with contract:
- The existence of a contract;
- The alleged wrongdoer’s knowledge of the contract;
- Intentional procurement of its breach;
- Without justification; and
- Damages.
See Kallok v. Medtronic, Inc., 573 N.W.2d 356, 362 (Minn. 1998).
Tortious interference with a contract often occurs when a competitor hires an employee subject to a noncompete agreement. In many cases, the former employer is able to sue both the employee for breach of contract and the competitor for tortious interference with a contract.
Tortious interference claims can be important tools for employers who utilize noncompete or nonsolicitation agreements to protect their businesses.
If you have questions about your noncompete or nonsolicitation agreements, or claims for tortious interference with a contract, contact a Minneapolis employment lawyer with LeBlanc Law & Mediation at 612-819-9652.
