Can a non-compete document be enforced in one state if the documents stipulatethat it will be governed by the laws of another state?

UPDATED: Aug 22, 2011

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Can a non-compete document be enforced in one state if the documents stipulatethat it will be governed by the laws of another state?

I am a salesman and am in the process of getting a job. I have 18 years of experience and many contacts and people with whom I have done business. I am being asked to sign a non-compete agreement that states that it will be governed by the laws of MN although the company HQ is here in CA where I live. CA law says that it is void but I am concerned about the MN part.

Asked on August 22, 2011 California


SJZ, Member, New York Bar / FreeAdvice Contributing Attorney

Answered 11 years ago | Contributor

A contract, including a non-competition agreement (since that's what a non-compete is: a contract) can be enforced in state A if it's governed under the laws of state B. That even includes when state A would otherwise not enforce the agreement. That's because

1) two parties may agree to apply the law of any jurisdiction; and

2) the courts of a state will enforce the choice of law that the parties to a contract made in their agreement.

So if you agree to have the non-competition agreement governed by the laws of MN, it will be enforceable per MN laws notwithstanding that it would otherwise be not enforceable in CA. You should familiarize yourself with the MN laws to make siure you're comfortable with it...or else try to negotiate some limitations or changes in the agreement before signing.

IMPORTANT NOTICE: The Answer(s) provided above are for general information only. The attorney providing the answer was not serving as the attorney for the person submitting the question or in any attorney-client relationship with such person. Laws may vary from state to state, and sometimes change. Tiny variations in the facts, or a fact not set forth in a question, often can change a legal outcome or an attorney's conclusion. Although has verified the attorney was admitted to practice law in at least one jurisdiction, he or she may not be authorized to practice law in the jurisdiction referred to in the question, nor is he or she necessarily experienced in the area of the law involved. Unlike the information in the Answer(s) above, upon which you should NOT rely, for personal advice you can rely upon we suggest you retain an attorney to represent you.

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