Occupation limits
South Dakota Non-Compete Law (2026): Enforceable with carve-outs
South Dakota puts the answer in the code rather than leaving it to judges. An employee may agree not to enter the same business or profession as the employer for up to two years after the agreement ends, and separately not to solicit the employer's existing customers for up to two years within a named county, municipality, or other specified area where the employer still operates. Health care is carved out: a contract signed on or after July 1, 2023 that would keep a licensed practitioner from practicing after leaving is voidable, subject to narrow exceptions for the sale of a practice and for reasonable client non-solicitation.
The rule
How South Dakota treats non-compete agreements
The health-care exemption is worded as voidable rather than void, so a practitioner has to assert it; it also leaves two doors open for employers, one for covenants attached to the sale of a practice and one for client non-solicitation clauses that carry reasonable geographic and time limits. Section 53-9-11.2 defines soliciting narrowly, as a targeted affirmative act aimed at a specific patient or client to persuade them to move their care or business, which means a general announcement of a new practice location is not solicitation.
If you are an employer
Two years is the outer limit and it is not a safe harbor, because Setliff still requires you to show the restraint is no broader than your actual interest; if any of your workforce holds a South Dakota health-care license, drop the practice restriction entirely and rely on a tailored client non-solicit.
If you are a worker
Anything past two years is void by statute, and if you hold one of the licenses listed in SDCL 53-9-11.1 and signed on or after July 1, 2023, the practice restriction itself is voidable.
| Classification | Statutory two-year ceiling, with health-care practitioners exempted |
|---|---|
| Pay threshold | No pay threshold |
| Maximum term | Two years from the date the agreement terminates. The ceiling applies independently to the same-business restraint and to the existing-customer restraint. |
| Notice or consideration | None. The statute allows the covenant to be signed at hiring or at any point during employment, and South Dakota courts treat continued employment as sufficient consideration. |
| Primary statute | S.D. Codified Laws § 53-9-11, with the health-care practitioner definition at § 53-9-11.1 and the practitioner exemption at § 53-9-11.2 |
Detail
What has changed, and what is still moving
Legislation 2024–2026
Two rounds. House Bill 1154 of 2021 (SL 2021, ch. 205), signed March 25, 2021 and effective July 1, 2021, first barred post-employment practice restrictions for named health-care professionals. SL 2023, ch. 160 rewrote that framework, amending § 53-9-11, expanding the practitioner definition in § 53-9-11.1, and moving the operative prohibition into § 53-9-11.2 for contracts entered on or after July 1, 2023.
Bills to watch
No significant restrictive bills pending
Leading cases
Setliff v. Akins, 616 N.W.2d 878 (S.D. 2000), supplies the three-part reasonableness overlay that operates inside the statutory ceiling: the restraint must be no greater than needed to protect the employer, must not impose undue hardship on the employee, and must not injure the public.
If you have one in hand
What can make a non-compete unenforceable in South Dakota
- Your occupation is carved out. Statutory two-year ceiling, with health-care practitioners exempted
- The scope is wider than the interest behind it. A restriction that reaches beyond the customers, trade secrets or goodwill the employer can actually point to is the most common reason a covenant fails in South Dakota.
Whether any of these applies turns on the wording of your own agreement, your role and the case law your court follows. This page maps the statutory landscape; it does not replace advice on a specific contract.
FAQ
South Dakota non-compete questions
Are non-compete agreements enforceable in South Dakota?
South Dakota puts the answer in the code rather than leaving it to judges. An employee may agree not to enter the same business or profession as the employer for up to two years after the agreement ends, and separately not to solicit the employer's existing customers for up to two years within a named county, municipality, or other specified area where the employer still operates. Health care is carved out: a contract signed on or after July 1, 2023 that would keep a licensed practitioner from practicing after leaving is voidable, subject to narrow exceptions for the sale of a practice and for reasonable client non-solicitation.
How long can a non-compete last in South Dakota?
Two years from the date the agreement terminates. The ceiling applies independently to the same-business restraint and to the existing-customer restraint.
Is there a minimum salary for non-competes in South Dakota?
No. South Dakota sets no income floor, so pay alone does not decide whether a covenant binds you. The test is whether the restriction goes further than the employer's legitimate interest requires in time, geography and scope of work.
What notice or consideration does South Dakota require?
None. The statute allows the covenant to be signed at hiring or at any point during employment, and South Dakota courts treat continued employment as sufficient consideration.
Sources
How this entry was checked
- Primary source. S.D. Codified Laws § 53-9-11, with the health-care practitioner definition at § 53-9-11.1 and the practitioner exemption at § 53-9-11.2 — the statutory text itself.
- Secondary sources consulted. S.D. Codified Laws §§ 53-9-11, 53-9-11.1, and 53-9-11.2 (Justia), Goosmann Law analysis of 2021 HB 1154, Setliff v. Akins, 616 N.W.2d 878 (S.D. 2000).
Check it against a third party
None of these is ours. If a figure here matters to a decision, verify it:
- Federal Trade Commission — non-compete hub
- Economic Innovation Group — State Noncompete Law Tracker
- Fair Competition Law (Beck Reed Riden) — 50-state legislation tracker
- GAO-23-103785 — Noncompete Agreements (May 2023)
This page is general legal information published by Jurizmo and is not legal advice, does not create an attorney-client relationship, and may not reflect amendments enacted after the review date above. Consult a licensed attorney in the relevant state before acting on any agreement.