For companies, trying to impose a non-compete clause on all employees is a problem. Instead, employers should discuss with an economic and labour law firm the organization of non-compete contracts and other employment contracts dealing with specific issues that are relevant to the circumstances of each employee. By ensuring that employment contracts are enforceable, companies can be sure that they have done everything they can to avoid costly quarrels in the future. Critics argue that competition bans can hinder employee mobility, stifle competition and prevent people from starting new businesses. This article looks at how Michigan courts are still somewhat supportive of competition bans. On July 15, 27, 2019, Michigan Attorney General Dana Nessel joined a multi-state effort asking the Federal Trade Commission (FTC) to take a tougher line against non-compete clauses and non-poaching agreements and use its powers of federal authority to infringe on the state`s contractual rights and treat these agreements as potential violations of the Sherman Act. They argued that agreements can hurt workers by limiting their employment opportunities and their ability to seek higher-paying jobs. Abraham Lincoln once noticed that if he had six hours to cut down a tree, he would spend the first four sharpening the axe. For employers, this type of attention to detail is particularly important when it comes to non-competition rules. Otherwise, as a recent Michigan appeals court shows, the only thing that can be reduced is the employer`s non-compete agreement and any chance of asserting it against a former employee. Non-competition rules can be used for multiple purposes. You can create a non-compete clause in Michigan to prevent former employees from signing things like the following: If you`re asked to sign a non-compete agreement, if you leave a company and you`re wondering what restrictions an employer can impose by law, or if you`ve been threatened with a non-compete or trade secret enforcement action, contact a lawyer immediately. NachtLaw`s lawyers can help you through a difficult transition while avoiding any damage to your career.
Contact us today to arrange a confidential consultation. An employer may choose not to hire you if you refuse to sign a non-compete agreement. If you are already employed and are facing a non-competition clause, applicability may depend on your employment status. If you are employed by the status “by begaire” and you choose not to sign the non-competition clause, the employer can terminate you. If you are employed as a “Just Cause” and choose not to sign the non-compete agreement, Michigan courts have found that refusing to enter into such an agreement individually does not constitute a “just cause” for termination. On the other hand, if you decide to sign the agreement, the employer must keep you for a “reasonable” time afterwards. If you are dismissed shortly after signing the agreement without a reasonable reason, the non-compete agreement may be non-binding. In other words, the employer cannot use this type of contract as a deception to free itself from a possible future competitor; he/she cannot have sent you back with “bad intentions”. Some courts have invalidated the agreements unless a new benefit – such as a higher salary, bonus, more ancillary benefits or promotion – is promised in exchange for your signature. Just over a month later, on August 29, 2019, recent legislation (HB 4874) was introduced to amend Section 4a (MCL 445.774a) of the Michigan Antitrust Reform Act. Hb 4874 aims in particular to make the following substantial changes to Michigan`s no-compete clause: the industry or nature of the employment investigation is related to what the non-compete clause specifically prohibits the worker from doing so. .