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A Michigan non-compete agreement is a legal document using restrictive covenants that allows a business to obtain an employee’s written promise that they will not disclose trade secrets, intellectual property, sensitive information, and business practices of the company to competing businesses. Non-compete agreements often restrict an employee’s ability to work in similar positions for a certain time period or within a geographical area after the termination of employment.
A non-compete agreement may stand on its own or it may be a clause in an employment contract. Before drafting a non-compete agreement, Michigan businesses should seek legal advice from a law firm practicing employment law. A lawyer can help ensure that an employer's reasonable competitive business interests are protected and that the document's enforceability in the Michigan courts is more likely to happen so that a former employee is less likely to take unfair advantage of their former employer.
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MCL 445 is known as the Michigan Antitrust Reform Act. Unlike many states that either disfavor non-compete agreements altogether or favor the employee, Michigan law requires a non-compete to be fair to both parties. If the document is found to be unfair in the restrictions or expectations of either party, the state reserves the right to step in and limit the stipulations of the contract.
Non-compete agreements must be honest and just purpose as well as protect legitimate business interests. They must have a reasonable time period of no greater than one year, a reasonable geographic area, and line of business. They also must not be offensive to public policy.
To write a Michigan non-compete agreement, review the Michigan Antitrust Reform Act. The following clauses should be included in the non-compete, but keep in mind that Michigan law requires that the agreement be fair and balanced and that the time period cannot be greater than one year.
The parties must sign and print their names to execute the non-compete agreement. Their signatures must be dated. Finally, the parties should each receive a copy of the finalized agreement for their records.
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