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Yes. Under Michigan law, non-compete agreements are enforceable as long as the contract is deemed reasonable by the courts in the following three areas:
As legally binding contracts, non-compete agreements must also adhere to any laws that govern contracts. If a non-compete is missing any elements of a valid contract it could be ruled unenforceable.
Most Michigan non-compete agreements last between six months and three years. Three years is the maximum duration that courts have consistently ruled as reasonable for non-competes.
When determining if the duration of a non-compete is reasonable, courts will look at all the facts surrounding the case including the scope of restricted activities and the restricted geographic area.
To get around a non-compete agreement, an employee needs to prove to the court that the terms of the contract are unreasonable. This could be done by showing that the duration is too long, the geographic boundary is too larger, or the scope of the restricted activity is too broad.
Courts in Michigan are permitted to limit or edit overly broad or unreasonable non-compete agreements in favor of an employee to make the contract enforceable. This practice is called blue penciling.
A non-compete agreement will be void if it does not include all required elements of a valid contract. The elements necessary to form a contract are:
In most cases, courts will allow continued employment to meet the requirements of adequate consideration for a non-compete agreement. The exception to this rule is if the employee is in a fixed term contract. In this case, there is no consideration and the contract could be void unless there is additional consideration like monetary compensation.
ContractsCounsel is not a law firm, and this post should not be considered and does not contain legal advice. To ensure the information and advice in this post are correct, sufficient, and appropriate for your situation, please consult a licensed attorney. Also, using or accessing ContractsCounsel's site does not create an attorney-client relationship between you and ContractsCounsel.
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