A South Dakota non-compete agreement can be used to restrict the information that someone can share during and after a term of employment. It can also be used to limit where someone can work during or following employment with a specific business. The goal of a South Dakota non-compete agreement is to prevent confidential information from being shared by current and former employees.
A non-compete agreement in South Dakota can be a versatile tool, but it must be legally enforceable as well.
Is a Non-Compete Legally Enforceable in South Dakota?
Yes, a non-compete agreement is legally enforceable in South Dakota; however, it must be written appropriately to ensure undue restriction is not placed on the employee. [1]
What’s Protected?
If the information is vital to the nature of the business, it should be protected. For example, trade secrets can be covered by South Dakota non-compete agreements. In addition, non-compete agreements in South Dakota can protect the company from unfair competition. A South Dakota non-compete agreement can also restrict someone from trying to steal existing customers from the business during or after their term of employment.
Reasonable Use and Exemptions
A South Dakota non-compete agreement must also meet all reasonable use and exemption guidelines. For example, the restriction can only apply to the same business or profession as that carried on by the employer. In addition, a non-compete agreement in South Dakota cannot exceed more than two years. A reasonable geographic area has to be specified, and the scope of the agreement could not be unduly harsh or restricted on the employee. The employer must be able to justify why certain geographic restrictions are being given.
- Enforceable when terminated without cause? Yes, factor
- Employee non-solicitation agreement permitted? No
- Customer non-solicitation agreements permitted? Yes
- Does continuing employment equal sufficient consideration? Yes
Non-Compete Agreement South Dakota Limitations
If you are writing non-compete agreements in South Dakota, there might be a few potential limitations to keep in mind. If the South Dakota non-compete agreement does not conform to the limitations listed below, it could be thrown out by a judge if it is challenged in court.
Limitations on time
A non-compete agreement in South Dakota cannot last longer than 2 years from the date of termination of the agreement if the employer continues to carry on like a business. Furthermore, if there is a breach of the non-compete agreement and South Dakota, the impacted party has up to 6 years to bring a lawsuit related to potential damages.
Non-compete agreement South Dakota geographical limitations
In South Dakota, there are no geographic limitations written into the state’s statutes, but if the non-compete agreement is too restrictive for a former employee, it could be challenged in court. South Dakota employers will have to justify why the geographic limitations have been put in place if the agreement is challenged. If the limitations cannot be justified, the agreement might be thrown out.
South Dakota Non-Compete Agreement Sample
When you are writing a non-compete agreement, make sure you use this South Dakota non-compete agreement template. You can download it in Word or PDF format:
Non-Compete Agreement
