Can I require employees to sign non-compete agreements in South Dakota? What are the requirements?

Non-compete agreements in South Dakota

South Dakota law allows employers to require employees to sign non-compete agreements, but there are certain requirements that must be met.

Requirements for non-compete agreements

1. Consideration: The non-compete agreement must be supported by consideration, which means that the employee must receive something of value in exchange for signing the agreement. This could be a job offer, a promotion, or some other benefit.
2. Reasonableness: The non-compete agreement must be reasonable in scope, duration, and geographic area. The agreement must be no broader than necessary to protect the employer’s legitimate business interests.
3. Legitimate business interests: The non-compete agreement must be designed to protect the employer’s legitimate business interests, such as trade secrets, confidential information, or customer relationships.
4. Notice: The employer must provide the employee with notice of the non-compete agreement before or at the time of employment.

Relevant South Dakota laws

• SDCL 47-11E-2: A corporation formed pursuant to § 47-11E-1 shall be organized solely for the purpose of conducting the practice of nursing only through persons qualified to practice nursing in the State of South Dakota.
• SDCL 47-11E-5: All shareholders of a corporation formed pursuant to § 47-11E-1 shall be persons duly licensed by the South Dakota Board of Nursing to practice nursing in the State of South Dakota.
• SDCL 60-8-4: Any agreement relating to employment, whether in writing or oral, which by its stated terms, or by implication, interpretation, or effect thereof, directly or indirectly denies, abridges, interferes with, or in any manner curtails the free exercise of the right to work by any citizen of the state of South Dakota, is a Class 2 misdemeanor.
• SDCL 60-9A-2: Employees shall have the right of self-organization and the right to form, join, or assist labor organizations, to bargain collectively through representatives of their own free choosing, and to engage in lawful, concerted activities for the purposes of collective bargaining or other mutual aid or protection.
• SDCL 47-11D-22: Any payments made to lay employees or into any such plan in behalf of lay employees are based upon their compensation or length of service or both, rather than the amount of fees or income received.
• SDCL 47-11E-15: Any payments made to lay employees or into any such plan in behalf of lay employees are based upon their compensation or length of service, or both, rather than the amount of fees or income received.
• SDCL 60-9A-14: Nothing in this chapter shall be construed as authorizing the execution or application of agreements requiring membership in a labor organization or requiring the payment of fees or contributions of any kind whatsoever in lieu of membership to a labor organization as a condition of employment.

Based on the relevant South Dakota laws, there are no specific provisions that prohibit or regulate non-compete agreements for nursing corporations. However, the non-compete agreement must meet the requirements mentioned above to be enforceable.

Jurisdiction

South Dakota

• Labor