Are Non-Competes Enforceable in South Dakota?
Last updated: 2026-10-07 · Verified against the statutes 2026-10-07
Enforceable — statute sets rules
Allowed up to 2 years; health practitioner covenants voidable
South Dakota voids restraints of trade except as statutes allow. An employee may agree, at hire or during employment, not to compete or solicit existing customers within a specified county, city or area for up to two years after leaving, while the employer carries on a like business there. Covenants entered on or after July 1, 2023 that restrict 28 listed licensed health practitioners (including physicians, nurses, PAs, dentists and therapists) are voidable, and since July 1, 2026 the same applies to developmental-disability community services providers.
Check a non-compete
Answer a few questions; the result cites the statute behind each point. Rules verified 2026-10-07. Saved only in your browser.
Thresholds are measured differently by state (salary, cash compensation, W-2 box 1).
Enforceable if reasonable
South Dakota enforces non-competes that protect a legitimate business interest and are reasonable in time, geography and scope.
- South Dakota: Allowed up to 2 years; health practitioner covenants voidable. SDCL 53-9-8
- Duration: 2 years after termination. SDCL 53-9-8
Other South Dakota rules to check
- Non-solicitation clauses: Non-solicitation of existing customers within a specified area is allowed for up to 2 years.
- If a court finds it too broad: No settled rule we could confirm.
General information, not legal advice. Enforceability also depends on the exact wording, the employer's legitimate interest and the facts; talk to an employment lawyer before relying on it.
South Dakota non-compete rules
- Independent contractors
- Not covered by the statute.
- Duration
- 2 years after termination
- Signed mid-employment
- The statute allows the agreement 'at the time of employment or at any time during employment.'
- Non-solicitation
- Non-solicitation of existing customers within a specified area is allowed for up to 2 years.
- Overbroad covenants
- No settled rule we could confirm
Profession-specific rules
- VoidCovenants entered on or after July 1, 2023 that restrict a physician's practice after employment are voidable (sale of a practice and patient non-solicits within 53-9-11 limits excepted). (effective July 1, 2023) SDCL 53-9-11.1, 53-9-11.2
- VoidSame voidable rule for the other listed practitioners, including PAs, RNs, LPNs, CRNAs, nurse practitioners, dentists, pharmacists, therapists, counselors, psychologists, social workers and EMTs. (effective July 1, 2023) SDCL 53-9-11.1, 53-9-11.2
- VoidRestrictive clauses with community services providers for people with developmental disabilities, in contracts entered on or after July 1, 2026, are voidable. (effective July 1, 2026) SB 153 (2026)
Recent and pending changes
- July 1, 2026: SB 153 (signed March 9, 2026) extends the voidable rule to developmental-disability community services providers. SB 153 (2026)
- July 1, 2023: Practitioner list expanded to 28 professions and covenants made voidable (SL 2023 ch. 160). SDCL 53-9-11.2
Federal law
There is no federal ban on employee non-competes. The FTC's 2024 Non-Compete Clause Rule (16 CFR Part 910), which would have voided most non-competes from September 4, 2024, never took effect: a Texas federal court set it aside nationwide on August 20, 2024 (Ryan LLC v. FTC). On September 5, 2025 the Commission voted 3-1 to drop its appeals and accept that ruling, and on February 12, 2026 it formally removed Part 910 from the Code of Federal Regulations. State law therefore decides whether a non-compete is enforceable.
Frequently asked questions
Are non-competes enforceable in South Dakota?
Allowed up to 2 years; health practitioner covenants voidable. South Dakota voids restraints of trade except as statutes allow. An employee may agree, at hire or during employment, not to compete or solicit existing customers within a specified county, city or area for up to two years after leaving, while the employer carries on a like business there. Covenants entered on or after July 1, 2023 that restrict 28 listed licensed health practitioners (including physicians, nurses, PAs, dentists and therapists) are voidable, and since July 1, 2026 the same applies to developmental-disability community services providers.
How long can a non-compete last in South Dakota?
2 years after termination
Did the FTC ban non-competes in South Dakota?
No. The FTC's 2024 rule never took effect — a federal court set it aside in August 2024, the FTC dropped its appeals in September 2025 and removed the rule from the Code of Federal Regulations in February 2026. State law controls, though the FTC still challenges some non-competes case by case.
Official Sources
Figures checked against these sources on 2026-10-07Other states
Same category (Enforceable — statute sets rules): Alabama, Arkansas, Florida, Georgia, Hawaii, Idaho, Louisiana, Michigan
Protect information instead with a confidentiality agreement (NDA generator), or hiring in South Dakota? Use the offer letter generator.
Not legal advice. Enforceability depends on the agreement's wording and the facts; consult an employment attorney licensed in South Dakota.