To avoid this, many employers use a non-compete agreement in Michigan to prevent former employees from working for a competing company for a certain period of time. Michigan has a «reasonable standardized» approach to assessing non-compete obligations. Although they are not preferred in Michigan, they are not completely empty. A non-compete obligation must be suitably narrow because it protects the reasonable competitive interests of an employer. It must be proportionate in its duration, geographical area and type of employment or enterprise. If an agreement is too broad, courts usually choose to restrict it. The degree of suitability often depends on discretion in the field of employment. In the event of termination or withdrawal, most non-compete obligations require that the company`s «trade secrets» be treated confidentially. For example, let`s say your company does digital marketing for security companies and your marketer gets a job for a company that sells wooden cabinets. A non-compete clause that would prevent your CMO from taking on this position would probably not be enforceable, as it would be difficult to demonstrate that your business is actually competing with the wood cabinet business.
Many Michigan employers use non-compete obligations. A non-compete obligation, which can also be described as a non-compete obligation, generally prohibits an employee from working for certain competitors for a certain period of time after the end of the employment relationship. Some states – California, North Dakota and Oklahoma – will not enforce non-compete obligations at all. And other states like Maine, Maryland, New Hampshire and Rhode Island have passed laws that make non-compete clauses unenforceable when it comes to low-wage workers. An employer may choose not to hire you if you refuse to sign a non-compete agreement. If you are already employed and face a non-compete obligation, applicability may depend on your employment status. If you are employed with «at will» status and choose not to sign the non-compete agreement, the employer may dismiss you. If you are employed as an employee «for just cause» and you choose not to sign the non-compete agreement, the Michigan courts have determined that the refusal to enter into such an agreement individually is not a «just cause» for termination.
On the other hand, if you decide to sign the agreement, the employer must keep you for a «reasonable» period thereafter. If you are dismissed shortly after signing the agreement without a valid reason, the non-compete agreement could be non-binding. In other words, the employer cannot use this type of contract as a pretext to free himself from a possible future competitor. He cannot have fired you in «bad faith». Some courts have struck down agreements unless a new benefit — such as a higher salary, bonus, more benefits, or promotion — is promised in exchange for your signature. As mentioned earlier, the purpose of a non-competition clause is to protect your business interests. Therefore, it is important that your agreement is clear about the interests it wants to protect. The Michigan Court of Appeals, in St Clair Medical, PC v. Borgiel, 270 Mich App 260, 266 (2006), concluded that «this is reasonable.» A restrictive agreement must protect against the employee obtaining an unfair advantage in competition with the employer, but must not prohibit the employee from using general knowledge or skills. See also Coates v Bastian Bros, Inc., 276 Mich App 498, 507 (2007), which states that such undertakings «shall be enforceable only to the extent that they are reasonable». I have extensive experience in representing employers in the preparation and enforcement of non-compete obligations. I also have extensive experience in representing persons accused of breaching a non-compete obligation.
In 2015, Rep. Peter Lucido (R-Washington Township) introduced a law (HB 4198) to completely ban non-compete rules in Michigan. There were no co-sponsors for the bill and it was never passed (and it wasn`t even put to a vote). Reputation. Lucido attempted to introduce new bills in 2016 (HB5311) and 2017 (HB4755), but led its efforts to ban non-compete obligations only with respect to «low-wage» employees, while imposing several other requirements for the applicability of other non-compete obligations. These laws, like the first, were never adopted and nothing substantial was introduced on the subject in 2018. The sector of activity or the type of job application has to do with what exactly the non-compete obligation prohibits the employee. An appropriate non-compete obligation may prohibit a former employee from working in a certain subset of an industry, but a non-compete obligation prohibiting a former employee from working in any capacity for a competitor, even in a position unrelated to the employee`s previous work, would be inappropriate. If you live in Michigan, there is no clear answer.
Some agreements are enforceable, others are not, and others may be limited in their application. To be enforceable, an agreement must be appropriate in terms of time and space and limited to the protection of the employer`s legitimate interests. Agreements that are unlimited in time or apulatively are often limited by judicial review. However, if the non-compete obligation is intended to suppress legitimate competition, it may infringe unfair commercial practices laws and may be totally unenforceable. MARA states that a non-compete obligation is enforceable to the extent that it is: Does a former employer accuse you of breaching a non-compete obligation? Are you asked to sign an agreement when you enter or leave a job? You should always seek advice from a lawyer before signing a non-compete agreement with a current, future or former employer. Our lawyers at NachtLaw can help you identify your objectives and then advise you on the legal limits and risks associated with non-compete obligations and how they relate to your future plans. Wondering how employees can protect themselves from overly broad agreements? Our lawyers have experience in reviewing non-compete obligations, advising parties on the applicability of the provisions and, if necessary, fighting them. We regularly represent clients when a former employer initiates or initiates a legal dispute. Just over a month later, on August 29, 2019, the current legislation (HB 4874) amending Section 4a (MCL 445,774a) of the Michigan Antitrust Reform Act was introduced. In particular, HB 4874 seeks to make the following significant changes to Michigan`s non-compete obligations: Non-compete obligations can be used for several purposes.
You can draft a non-compete clause in Michigan to prevent former employees from doing things like: Michigan courts will enforce non-compete obligations that are «reasonable.» It is reasonable to balance the employer`s entrepreneurial interest against the employee`s right to work in his or her profession and earn a living. Under Michigan law, it is at the discretion of the court if a non-compete obligation is challenged in court and parts of it are deemed appropriate, while other parts are deemed inappropriate to limit inappropriate parts of the agreement in order to make them enforceable. An employment lawyer can help you draft a non-compete agreement that complies with state laws while protecting your company`s interests. Many Michigan companies require their employees to sign non-compete agreements. While many people assume that these types of agreements are unenforceable, it is a fact that non-compete obligations under Michigan can be enforceable as long as certain requirements are met. This bill has not yet been passed by the House of Representatives or the Senate, but it is something that employers should watch out for. Similar efforts are being made in Congress to restrict competition for low-wage workers at the federal level. A non-compete clause is a legal document that protects Michigan business owners by preventing employees from working for competing companies for the duration specified in the agreement. In addition, the bill would prohibit employers from seeking or receiving non-compete bans from certain low-wage workers. Michigan employers with non-compete obligations should keep an eye on the bill to determine if it goes into effect. .