Are Non-Competes Enforceable for Therapists and Behavioral Health Staff in North Dakota?
North Dakota voids employee non-competes outright under N.D.C.C. § 9-08-06 — for therapists, BCBAs and every other employee — and its Supreme Court has struck client-diversion clauses; what the courts let stand, and what your practice can still protect.
Updated October 7, 2026
No. North Dakota voids employee non-competes outright: North Dakota Century Code § 9-08-06 makes any contract that restrains a lawful profession, trade or business void to that extent, and its only exceptions cover business sales and owners — not employees.
That applies to every therapist, BCBA, counselor and staff member you hire, however short or local the clause is.
The North Dakota Supreme Court has also struck client-diversion clauses.
Here is what governs and what your practice can still protect.
Rules vary by state and change
This guide explains federal rules and the state rules it names, as of the date above.
Licensure, supervision, payer and employment rules differ by state and are revised often, so confirm current requirements with your state board, Medicaid agency, labor department or employment counsel before you act on them.
It is general information, not legal advice.
The short answer for North Dakota
No — North Dakota says so by statute rather than by court balancing.
North Dakota Century Code § 9-08-06 voids any restraint of a lawful profession, trade or business "to that extent," and its only exceptions cover business sales and owners, not employees.
There is no separate rule for counselors, social workers, MFTs, psychologists, behavior analysts, nurses or physicians: a therapist, a BCBA and your office staff all sit under the same ban.
Nor is there a "short and local" version that works: § 9-08-06 has no reasonableness test for employees, so no one-year limit or small radius saves a clause.
How North Dakota compares with the rest of the country — non-competes nationally tracks the other states and what they allow.
The governing statute or case law
The governing law is a statute: N.D.C.C. § 9-08-06, whose opening line is the rule — "A contract by which anyone is restrained from exercising a lawful profession, trade, or business of any kind is to that extent void."
Nothing about how a clause is worded changes that result for an employee.
The exceptions matter for owners more than for staff.
A seller of a business's goodwill, with that seller's partners, members or shareholders, may agree with the buyer to stay out of a similar business within a reasonable area and time; partners, members or shareholders may also sign covenants on dissolution, dissociation or sale of an ownership interest.
An owner selling a stake can still sign an enforceable covenant — clinicians and staff on payroll cannot.
The North Dakota Supreme Court has applied the statute to employment contracts.
In Warner & Co. v. Solberg (2001 ND 156), it held that its earlier decisions "prohibit restraints on solicitation after the employment ceases."
The same opinion notes the Legislature has been asked several times to let employers restrict former employees from soliciting clients and has not passed those bills — and the statute's short exception list confirms that no client-restraint carve-out exists.
Healthcare- and mental-health-specific rules
None.
Section 9-08-06 covers a lawful profession, trade or business of any kind, and the research for this page located no North Dakota healthcare- or mental-health-specific non-compete statute: no special rule for counselors, social workers, psychologists or behavior analysts, and no income threshold that flips the result for higher-paid staff.
A psychiatrist's covenant is void for the same reason as a counselor's.
What courts require (time, area, legitimate business interest)
In states that allow employee non-competes, this is where the drafting levers live — how short the term, how tight the radius.
In North Dakota there is nothing to calibrate: the "within a reasonable geographic area and for a reasonable length of time" language in § 9-08-06 is the measure for a seller of business goodwill, not a departing therapist.
What the North Dakota Supreme Court examined in Warner was what each clause actually restrains — the analysis that decides the client and employee clauses covered next.
One doctrine does run your way: because § 9-08-06 voids a restraint only "to that extent," North Dakota courts separate an offending clause and keep the rest of the agreement — the court quoted the rule that "if an unreasonable restraining clause can be separated leaving a reasonable agreement, it is valid to do so."
That preserves your pay, confidentiality and other terms; it does not resurrect the covenant.
Client and employee non-solicitation clauses
Client non-solicitation clauses are not a safe substitute here.
The North Dakota Supreme Court has read § 9-08-06 to prohibit restraints on solicitation after the employment ceases, and in Warner it voided a clause that barred a former employee from writing business for a client who came to her on her own, because the clause restrained the client's choice as well as hers.
Two cautions.
Warner was an insurance-agency dispute, not a therapy-practice case, so treat it as the North Dakota Supreme Court's reading of the statute, not a holding about counseling clients.
And the research for this page found no published North Dakota decision after 2001 upholding a client non-solicit for a healthcare employee — have North Dakota employment counsel review any client clause before you rely on one.
The clause Warner did uphold was aimed at staffing, not clients: soliciting co-workers to leave for a competitor, drawn narrowly, was "not void as a restraint of trade" — the one employee restraint with North Dakota case law behind it.
Client non-solicitation rules differ from state to state; our guide to non-solicitation clauses maps the states and the ethics standards that shape a client handoff.
What North Dakota practices should do instead or in addition
Start by taking the unenforceable clauses out of your templates: the non-compete is void however it is worded, and the client non-solicit is at serious risk.
A clause you cannot enforce still colors an offer.
Protect information, not territory.
North Dakota has adopted the Uniform Trade Secrets Act (N.D.C.C. ch. 47-25.1), so genuine trade secrets stay protectable.
Under the federal Defend Trade Secrets Act, business information — including compilations such as client lists — is a trade secret only if you take reasonable measures to keep it secret and it has independent economic value from not being generally known.
Put confidentiality terms in the employment agreement itself and limit who can export a full caseload list.
Use the covenants that still hold up: the sale-of-practice exception the statute allows, covered above, and an employee non-solicit kept narrow on the Warner model — solicitation of co-workers, nothing about serving clients who arrive on their own.
If the goal is recouping supervision or credential costs, a training repayment agreement is a separate instrument with its own rules — our guide to training repayment agreements covers how they work and the states that restrict them; how North Dakota treats your specific wording is a question for your employment counsel.
Beyond those covenants, retention is the real protection — our guide to clinician retention covers what keeps clinicians and BCBAs in the seat.
Before you hand a North Dakota employment agreement to a clinician
- Remove the non-compete from every employee packet — it is void under § 9-08-06 whatever the length or radius.
- Rewrite or drop the client non-solicit: the North Dakota Supreme Court reads § 9-08-06 to prohibit restraints on solicitation after employment ends, and it struck the client clause before it.
- If you keep an employee non-solicit, keep it to solicitation of co-workers, as narrow as the clause Warner & Co. v. Solberg let stand.
- Decide which information is genuinely secret — client lists, fee schedules, coverage schedules — and put reasonable measures around it.
- Put confidentiality terms in the employment agreement itself rather than leaning on a covenant.
- Buying or selling a practice? Put the covenant in the sale documents, where the statute allows it.
- Funded supervision hours or a credential? Review the repayment wording with North Dakota employment counsel before you rely on it.
Questions employers ask
If a therapist signs a non-compete voluntarily, can a North Dakota practice enforce it?
No. North Dakota Century Code § 9-08-06 makes any contract restraining someone from exercising a lawful profession, trade or business void to that extent, and a signature does not create an exception.
The statute's only exceptions cover a seller of a business's goodwill and partners, members or shareholders on dissolution, dissociation or sale of an ownership interest.
An employee who signs willingly is in the same position as one who is required to sign: the clause is void.
What happens to the rest of an employment agreement when the non-compete is void?
North Dakota voids an unlawful restraint only “to that extent,” and the North Dakota Supreme Court has followed the rule that if an unreasonable restraining clause can be separated leaving a reasonable agreement, it is valid to do so.
In practice the court strikes the covenant and the rest of the contract — pay, confidentiality and your other terms — survives intact.
Can I stop a departing therapist from taking my client list in North Dakota?
Not with a client non-solicit — the North Dakota Supreme Court has held that the statute prohibits restraints on solicitation after employment ends.
What you can protect is the information itself: North Dakota has adopted the Uniform Trade Secrets Act, and under federal trade-secret law a client list counts as a trade secret only if you take reasonable measures to keep it secret and it has independent economic value from not being generally known.
Lock down exports and limit who can pull a full caseload list.
Does North Dakota let me enforce a non-compete when I sell my practice?
Yes.
The exceptions in N.D.C.C. § 9-08-06 are built for exactly this: a seller of a business's goodwill — and the seller's partners, members or shareholders — can agree with the buyer not to carry on a similar business within a reasonable geographic area and for a reasonable length of time, and partners, members or shareholders can sign covenants on dissolution, dissociation or sale of an ownership interest.
None of these exceptions reaches ordinary employees.
Sources
- North Dakota Century Code § 9-08-06 — contracts in restraint of trade (retrieved October 7, 2026)
- Warner & Co. v. Solberg, 2001 ND 156 (N.D. Supreme Court) (retrieved October 7, 2026)
- 18 U.S.C. § 1839 — Defend Trade Secrets Act, trade secret definition (Cornell LII) (retrieved October 7, 2026)
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