Minnesota recently amended the Deceptive Trade Practices Act (Minn. Stat. § 325D.44) to allow a private right of action for unfair competition. The new law states that “[a] person engages in a deceptive trade practice when, in the course of business, vocation, or occupation, the person: . . . (13) engages in (i) unfair methods of competition, or (ii) unfair or unconscionable acts or practices.” Unfair competition is defined in Minn. Stat. § 325F.69, Subd. 8, which states, “an unfair method of competition or an unfair or unconscionable act or practice is any method of competition, act, or practice that: (1) offends public policy as established by the statutes, rules, or common law of Minnesota; (2) is unethical, oppressive, or unscrupulous; or (3) is substantially injurious to consumers.”
This new statutory definition is broad and potentially could apply in a number of circumstances, including actions that are unethical but not otherwise unlawful. Courts will need to determine the boundaries of this definition. Now that non-competes are void in Minnesota, businesses faced with unfair competition by a rival should consider invoking this statutory claim when appropriate.
Minnesota’s Deceptive Trade Practices Act allows for injunctive relief and attorney’s fees but not monetary damages. Injunctive relief is a powerful tool, however, and may be effective in preventing harm from unfair competition in the marketplace. A request for injunctive relief under the Deceptive Trade Practices Act can be asserted along with other claims for tortious interference, breach of contract, or misappropriation of trade secrets, depending on the facts. See Minn. Stat. § 325D.45, Subd. 3 (“The relief provided in this section is in addition to remedies otherwise available against the same conduct under the common law or other statutes of this state.”).
As with any new law, there will be ongoing questions and issues to work through regarding unfair competition and the new non-compete ban in Minnesota. Please contact John Ella to discuss the questions addressed above or any other HR & Employment Law questions that may arise.
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