Non-compete agreements - South Dakota

Summary of differences between federal and state regulations

The state of South Dakota has a body of laws which address non-compete agreements.

In South Dakota, non-compete agreements are limited to no more than two years in length, which is valid in the stated geographic area.

Partners dissolving a partnership and owners selling a business may also enter into non-compete agreements.

State

Contact

South Dakota Department of Labor

Regulations

South Dakota Statutes, § 53-9-8. Contracts in restraint of trade void, exceptions.
Every contract restraining exercise of a lawful profession, trade, or business is void to that extent, except as provided by §§53-9-9 to 53-9-11, inclusive.

South Dakota Statutes, § 53-9-9.Sale of good will — Seller's agreement with buyer to refrain from carrying on similar business, validity.
Any person who sells the good will of a business may agree with the buyer to refrain from carrying on a similar business within a specified county, city, or other specified area, as long as the buyer or person deriving title to the good will from the seller carries on a like business within the specified geographical area.

South Dakota Statutes, § 53-9-10.Dissolution of partnership — Agreement of partners to refrain from carrying on similar business, validity.
Partners may, upon or in anticipation of a dissolution of the partnership, agree that none of them will carry on a similar business within the same municipality where the partnership business has been transacted or within a specified part thereof.

South Dakota Statutes, § 53-9-11. Employment contract — Covenants not to compete.
An employee may agree with an employer at the time of employment or at any time during his employment not to engage directly or indirectly in the same business or profession as that of his employer for any period not exceeding two years from the date of termination of the agreement and not to solicit existing customers of the employer within a specified county, first or second class municipality, or other specified area for any period not exceeding two years from the date of termination of the agreement, if the employer continues to carry on a like business therein.

Federal

Contact

Department of Labor

Regulations

None.