A Michigan Non-Compete Agreement is a legal document used by businesses to protect their trade secrets and other confidential information. This agreement prohibits employees from sharing such information with competitors and from seeking employment with a competitor for a set duration.
It can also outline which information an employee is permitted to share with others. Implementing a non-compete agreement can be a wise decision for businesses looking to safeguard their proprietary information.
Legally Enforceable in Michigan?
A non-compete agreement is legally enforceable in Michigan; however, several rules, regulations, and guidelines must be followed. If these guidelines are violated, a judge could decide that the non-compete agreement is no longer enforceable as per § 445.774a.
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 a legitimate and just purpose to protect the business’s legitimate interests.
It cannot last 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.
Limitations on Time
In Michigan, you have six years to bring a lawsuit in the event of a breach of a non-compete agreement.
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.
The agreement must have geographic constraints that match the scope of the business’s interests. If a judge reviews the non-compete contract and decides that the geographic limitations are excessive, it could be deemed invalid.
Sample
If you want to draft a non-compete agreement in Michigan, you can use a helpful Michigan non-compete agreement template. It is available for download in Word and PDF formats:
