Bill
HB 1180
Standardizes enforceability of non-competes for jointly owned businesses, clarifying scope, duration, and geography when multiple owners operate the entity.
HB 1180 (South Dakota, 2026) — Summary
Purpose and intent
- The bill aims to ensure the validity and enforceability of non-compete agreements in the context of jointly owned business entities. It addresses the interplay between non-compete covenants and business structures where multiple owners jointly operate a business.
Key provisions and changes (highlights)
- Non-compete validity: The bill provides specific standards or criteria under which non-compete agreements involving jointly owned entities would be considered valid and enforceable in South Dakota.
- Context of jointly owned entities: It clarifies how non-compete restrictions apply when a business is owned collectively by multiple individuals or entities, potentially including partnerships, LLCs, or other jointly owned arrangements.
- Scope and enforceability: The measure may set parameters on the geographic scope, duration, and type of activities restricted by non-competes within jointly owned ventures, aligning them with South Dakota’s existing statutory framework and public policy.
- Uniform treatment: The bill seeks to standardize enforcement when multiple owners are involved, preventing ambiguities that could arise from applying standard non-compete rules to joint ownership situations.
- Relationship to other restrictions: It may address how non-competes interact with fiduciary duties, operating agreements, or governance documents of jointly owned businesses.
Who is affected
- Owners and operators of jointly owned businesses within South Dakota.
- Employers who utilize non-compete agreements in the context of partnerships, LLCs, or other jointly owned enterprises.
- Potential employees, contractors, or partners who would be subject to non-compete covenants tied to a jointly owned entity.
- Legal and human resources professionals advising jointly owned businesses on enforceability and compliance.
Procedural and timeline aspects
- Introduction and sponsorship: Co-sponsors include Will Mortenson and Steve Kolbeck.
- Legislative journey: Passed through House Judiciary (Do Pass) and Judiciary committee; moved to the full House where it passed; then advanced to the Senate (Commerce and Energy committee) and passed; subsequently delivered to the Governor.
- Signing and effective date: Governor signed the bill on March 12, 2026. The legislative history indicates a formal enactment following standard timelines for signature and eventual publication as law.
- Status: Signed into law in March 2026, indicating the provisions are in effect as of that date or as specified in the bill’s effective date section (not provided in the summary).
Notes
- The provided summary reflects the bill’s stated aim and the typical mechanics of non-compete regulation in the context of jointly owned entities. For precise language, including definitions (e.g., what constitutes a “jointly owned entity”), any transitional provisions, and exact enforceability standards (duration, geographic scope, permissible activities, severability), consult the enacted text and any related administrative guidance.
If you’d like, I can extract and quote the exact statutory language or map the bill to existing South Dakota non-compete statutes to highlight differences and potential policy implications.
Compiled from official sources — confirm details with the bill’s official record.
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