Reasonableness in Michigan noncompete agreements

On Behalf of | Jul 31, 2020 | Blog |

Businesses and companies have a variety of methods that help wrestle control of a marketplace. Establishing a monopoly is technically illegal, but other agreements including noncompetes and non-solicitations help squelch competition by protecting the company from employees who no longer work for them 

As Forbes points out, these agreements can hurt an employee’s ability to make a living. Key employees with advanced skills in that particular market may find themselves unable to leverage said skills to make enough money to meet their needs. 

Avoiding unfair agreements

While it is a luxury to pick through jobs that do or do not have these agreements, sometimes there is no avoiding it. In these cases, negotiation may result in a company waiving the agreement or adjusting it so that it plays to both parties fairly. Some adjustable factors include length of time and geographic limits. 

With a lawyer, prospective employees may be able to prove that a noncompete is unreasonable. State law is in charge of these agreements and Michigan can rule an unreasonable contract unenforceable altogether. 

Unreasonable agreements

As the Michigan Bar states in a 2016 journal, drafting an enforceable noncompete is a challenge. The state may deem an agreement unreasonable and unenforceable if its terms including duration, geography and scope overprotect an employer’s legitimate competitive interest by curbing a former employee’s own. 

The Michigan Bar recommends that each noncompete have specific and often custom wording dictating the employer’s competitive industry, the particular employee’s role and the confidential information they may have access to. 

Any prospective, current or former employee of a competitive company must be aware of their corporate flexibility for the future and should keep in mind what kind of control a noncompete leverages onto them.