Many companies in Michigan will use a non-compete agreement to protect valuable information considered vital for the business. Employers want to make sure their employees do not share their secrets with the competition, so Michigan employers can use a non-compete agreement to prevent employees from seeking employment with one of their competitors for a certain length of time. Furthermore, a Michigan non-compete agreement can dictate the type of information that can and cannot be shared by an employee with others.
Is a Non-Compete Legally Enforceable in Michigan?
Yes, a non-compete agreement is legally enforceable in Michigan; however, there are several rules, regulations, and guidelines that have to be followed. If any of these guidelines are violated, then a judge could decide that the non-compete agreement is no longer enforceable. [1]
What’s Protected?
There are several categories of information that can be protected by a non-compete agreement in Michigan. For example, an employer can use this agreement to protect confidential information, including trade secrets, from being shared with the public, including other potential employers. An employer in Michigan can also use a non-compete agreement to protect goodwill from being shared with others. In general, information considered vital to the business can be protected by a non-compete agreement.
Reasonable Use and Exemptions
If Michigan non-compete agreements are not reasonably used, they might not be considered valid. In Michigan, this agreement must have an honest and just purpose to protect the legitimate interests of the business. It cannot last any more than one year, and any spatial limitations must be reasonable. Furthermore, non-compete agreements in Michigan must be limited in scope and consistent with the employer’s line of business, and they cannot be injurious to the public interest. There are no professions that are considered exempt from non-compete agreements in Michigan.
- Enforceable when terminated without cause? Yes
- Employee non-solicitation agreement permitted? Yes
- Customer non-solicitation agreements permitted? Yes
- Does continuing employment equal sufficient consideration? Yes
Non-Compete Agreement Michigan Limitations
When drafting a non-compete agreement in Michigan, it is important to understand that there are some limitations. If these limitations are not followed, then a judge could decide to throw out the non-compete agreement. To prevent this from happening, employers must be aware of certain rules and regulations.
Limitations on time
In Michigan, you have 6 years to bring a lawsuit in the event of a breach of a non-compete agreement.
Non-compete agreement Michigan geographical limitations
There are no specific geographic limitations that a non-compete agreement in Michigan has to follow; however, the guideline is that the non-compete agreement could not be unduly harsh or burdensome in terms of time and space. This means that if a judge reviews the non-compete agreement and decides that the geographic limitations are excessive, it could be deemed invalid. The agreement must have geographic limitations that match the scope of the business’s interests.
Michigan Non-Compete Agreement Sample
If you want to draft a non-compete agreement in Michigan, we have a helpful Michigan non-compete agreement template that you can use. It is available for download in Word and PDF formats:
Non-Compete Agreement
