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Legal Matters: Non-Competition Agreements in Michigan

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Today we're going to talk about non-compete agreements in Michigan. Non-competing agreements are enforceable in Michigan as long as the terms of the non-compete are reasonable. Disputes surrounding non-competition agreements typically involve reasonableness in restrictions relating to the amount of time it applies, the geographic scope of the agreement, and the type of business that a former employee can compete. Even where a non-competition agreement is found to be unreasonable, courts are able to modify the agreement to be "reasonable" and still enforce the agreement. An employer seeking to enforce a non-compete must demonstrate a business interest greater than mere competition. The non-compete should protect the former employer from unfair advantage gained by a competitor who hires a former employee. Employers typically require non-competition agreements for employees who have access to confidential and proprietary information, such as research and development employees, senior management, and corporate executives.

Before an employee can be bound by the terms of a non-competition agreement, an employee must sign an agreement in writing agreeing to the terms. Even where an employee signs such an agreement, it doesn't mean that it is automatically enforceable. The terms need to be reasonable and necessary to protect the competitive business interests of the employer.

Information provided by Julie Gafkay of Gafkay Law.