In the recent case of Capistrant v. Lifetouch National School Studios, Inc., No. A16-1829, 2018 BL 263415 (July 25, 2018), the Minnesota Supreme Court had occasion to consider whether a 25+ year employee’s failure to return all of his employer’s property immediately upon termination justified the forfeiture of $2.6MM in compensation. The case reminds us once again that employment agreements will not always be enforced as drafted. Continue reading
Under Minnesota law, an employer does not need to give an employee separate consideration for signing a non-compete agreement provided it is signed at the “inception” of the employment relationship. A non-compete signed by an employee on her first day of work would seem to satisfy this requirement.
The Minnesota Court of Appeals however, recently affirmed a district court’s invalidation of a one-year non-compete agreement signed on the first day of work for lack of independent consideration. According to the court, the inception of the employment relationship occurred when the employee accepted the job offer a week earlier during the job interview, thus requiring the employer to provide her independent consideration to sign the non-compete agreement on her first day in order to render it valid and enforceable. Continue reading