A South Dakota Non-Compete Agreement is a legal document that can limit the sharing of information by an employee during and after their employment. It can also restrict where an employee can work during or after their employment with a particular company.
The main purpose of such an agreement is to prevent the disclosure of confidential information by current or former employees.
Reasonable Uses and Objections
- 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.
Legally Enforceable in South Dakota?
A non-compete agreement is legally enforceable in South Dakota; however, it must be written appropriately to ensure that undue restriction is not placed on the employee as per § 53-9-11.
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 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 justify why certain geographic restrictions are being given.
A non-compete agreement in South Dakota cannot last longer than two years from the agreement’s termination date 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.
In South Dakota, no geographic limitations are 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. The agreement might be thrown out if the limitations cannot be justified.
When you are writing a non-compete agreement, use a South Dakota non-compete agreement template. You can download one here in Word or PDF format: