Michigan

Some Issues for a Michigan Business to Consider When Deciding Whether to Enforce a Non-Compete Agreement

The Michigan Antitrust Reform Act provides for the enforcement of properly prepared and implemented non-compete agreements. A Michigan business that wants to enforce a non-compete agreement can start a legal proceeding and obtain an injunction to prevent the breach of the agreement.

But, it is important to remember that just because a company can enforce a non-compete agreement doesn't mean that it necessarily should. Deciding whether to sue an ex-employee for violating a non-compete agreement involves a number a complicated factors.

These include determining whether the former employee is a threat to the company, as well as considering the possibility that the court will refuse to enforce the non-compete agreement in question. Non-compete agreements must comply with certain legal requirements to be enforceable, and its surprising how many businesses employ non-compete agreements of dubious quality.

If the court does refuse to enforce the non-agreement, not only would it be embarrassing for the company, it could also have serious ramifications for the enforceability of the rest of the company's non-compete agreements. On top of these considerations, the company needs to consider the cost of litigation, both financial and otherwise.

Of course, the decision becomes much simpler if the former employee has taken private/confidential company information or trade secrets, or if he or she was an important part of the management team. This type of information is protected by the Michigan Uniform Trade Secrets Act and Michigan common law.

When a Michigan business is confronted with this sort of situation, it should immediately seek the advice and counsel of a Michigan business lawyer who is experienced with non-compete agreements, trade secrets, and unfair competition issues.

Full post as published by Michigan Business Lawyer Blog on March 21, 2008 (boomark / email).