Are non-compete agreements enforceable in Michigan?
1. Baseline Rule. MCL 445.774a, part of the Michigan Antitrust Reform Act (MARA), authorizes employee non-competes. They are enforceable "to the extent that the agreement is reasonable as to its duration, geographical area, and the type of employment or line of business" and protects "the employer's reasonable competitive business interests."
2. Reasonableness Factors. Michigan courts apply a multi-factor test under Coates v. Bastian Bros., Inc., 276 Mich. App. 498 (2007): (a) protectable interest — trade secrets, customer goodwill, confidential information, specialized training; (b) geographic scope tied to employer's actual market; (c) duration of 6 months to 2 years is typical; (d) hardship on the employee; (e) public interest.
3. Consideration. Continued at-will employment is sufficient consideration in Michigan.
4. Wage Thresholds. None — though legislative proposals continue to surface.
5. Blue Pencil / Reformation. MCL 445.774a expressly authorizes courts to "limit the agreement to render it reasonable." Michigan judges actively reform overbroad covenants.
6. Industry Carve-Outs. Lawyers barred by MRPC 5.6. Physicians: enforceable. Broadcasters: no statute.
7. FTC Rule. Enjoined nationwide by Ryan LLC v. FTC (E.D. Tex. Aug. 2024); on appeal.
8. Garden Leave / Forfeiture-for-Competition. Permitted.
9. Choice of Law. Michigan courts apply Michigan law to Michigan employees where another state's law would offend MARA's reasonableness standard.
This is legal information, not legal advice.
- Your covenant has no geographic limit or covers all of North America
- Employer seeks an injunction in Michigan circuit court
- You are a physician and the covenant would force patient transfer
- MCL 445.774a (Michigan Antitrust Reform Act)
- Coates v. Bastian Bros., Inc., 276 Mich. App. 498 (2007)
- St. Clair Med., P.C. v. Borgiel, 270 Mich. App. 260 (2006)
This is legal information, not legal advice. Laws vary by jurisdiction and change frequently. Always verify current law with official sources and consult a licensed attorney in your jurisdiction for advice on your specific situation.