What Michigan Business Owners Should Know About Non-Compete Agreements

Some of your employees will learn valuable or proprietary information about your business. Understandably, you want to prevent them from sharing important details with your competitors. You had them sign a non-compete agreement when they were hired, but will the agreement be enforceable if the employee leaves your business?

Enforceability of Michigan Non-Compete Agreements

Non-compete agreements are usually enforceable in Michigan if the agreement places only reasonable restrictions on the employee and protects a legitimate business interest of the employer.

If there is a disagreement over whether a non-compete agreement should be enforced, a Michigan court will consider:

• The nature of the employer’s business
• The employee’s role in that business and whether the employee had access to proprietary and confidential information
• The employee’s client relations
• Whether the agreement is reasonable with respect to its duration, the geographical area it covers, and the types of business it includes
• Whether the employee is likely to find other employment if the agreement is enforced
• Whether the harm to the employee outweighs the benefit to the employer

Non-compete agreements may be vital to your business. They may prevent employees from starting their own business or working for your competitors and benefiting from soliciting your customers or using your ideas. However, courts are reluctant to prevent employees from working. Therefore, the right balance between protecting your rights and the employee’s rights must be struck in order for the court to enforce the agreement.

Get the Business Law Advice You Need Before a Problem Arises

You need to trust that the information your employees have won’t be used for the benefit of a competitor. Therefore, you may need an enforceable non-compete agreement signed when your employee is first hired.

Our experienced Bloomfield Hills business law attorneys know what circumstances to anticipate and how to create enforceable non-compete agreements to benefit our clients. We encourage you to call us, text us, or complete our online contact form today to learn more about how to protect your business interests.