Legislation is pending in the Michigan House to essentially ban the use of non-compete agreements by employers. Amending the 30-year old law would make protecting job providers' intellectual property nearly impossible.
Where We Stand:
The Michigan Chamber is opposed to unwarranted legislative interference in private contracts and supports the continued use of non-compete agreements.
Non-competes are a basic fairness issue, used to protect employer interests. Non-competes are used to protect intellectual property, customer relationships and client lists, to deter competitors from hiring away employees, to qualify for trade secret protection, and/or to enhance the value of a company for future sale.
With over 30 years of case law developed in this issue area, the courts have consistently found that, to be enforceable, a non-compete agreement cannot completely restrain an employee's ability to earn a livelihood but, rather, must be reasonably tailored as to its duration, geography and scope of activity restricted and must be used to protect the legitimate business interest of the party seeking enforcement.
Previously Passed or Defeated:
- HB 4198 of 2015 - Ban Use of Non-Compete Agreements - BLOCKED
30 years later, a noncompete ruling has been forged into law, Crain's Detroit Business, March 15, 2015
House bill would ban noncompete agreements in Michigan, Crain's Detroit Business, March 22, 2015
Korovesis and Fuhs: Defending non-compete agreements, The Detroit News, March 20, 2015