Sec. 38. 

[181.991] RESTRICTIVE FRANCHISE AGREEMENTS PROHIBITED.

Subdivision 1.

Definitions.

(a) For purposes of this section, the following terms have
the meanings given them.

(b) “Employee” means an individual employed by an employer and includes independent
contractors.

(c) “Employer” has the meaning given in section 177.23, subdivision 6.

(d) “Franchise,” “franchisee,” and “franchisor” have the meanings given in section
80C.01, subdivisions 4 to 6.

Subd. 2.

Prohibition on restrictive franchise agreements.

(a) No franchisor may
restrict, restrain, or prohibit in any way a franchisee from soliciting or hiring an employee
of a franchisee of the same franchisor.

(b) No franchisor may restrict, restrain, or prohibit in any way a franchisee from soliciting
or hiring an employee of the franchisor.

(c) Any provision of an existing contract that violates paragraph (a) or (b) is void and
unenforceable. When a provision in an existing contract violates this section, the franchisee
must provide notice to their employees of this law.

Subd. 3.

Franchise agreement amendment.

Notwithstanding any law to the contrary,
no later than one year from the effective date of this section, franchisors shall:

(1) amend existing franchise agreements to remove any restrictive employment provision
that violates subdivision 2; or

(2) sign a memorandum of understanding with each franchisee that provides that any
contract provisions that violate subdivision 2 in any way are void and unenforceable, and
provides notice to the franchisee of their rights and obligations under this section.

EFFECTIVE DATE.

This section is effective the day following final enactment.