In general, covenants not to compete involve an employee in the state of Michigan who agrees not to work for competitors of their employer when they leave the company. Such covenants are often called "non-compete" clauses". Signing such an agreement can either be a condition for being employed, or the employee may receive additional compensation for doing so.
When are Covenants not to Compete Unenforceable?
Foreseeing whether or not a judge will uphold a covenant not to compete is generally difficult. While the employer?s interests are significant, Michigan courts place great weight on an individual?s freedom to pursue the employment they want. Accordingly, courts have only upheld those agreements that they consider reasonable under the circumstances. Some provisions that courts have considered to be unreasonable include terms that last for an unusually long period of time or that cover a geographic around Ann Arbor that is unreasonably broad.
Non-compete clauses are also limited in that they may only apply to competitors who are rationally related to the industry of the employer. Finally, there must be a valid business interest which motivates the employer's mandating a covenant not to compete.
Do I Need an Attorney when Dealing with a Covenant not to Compete?
Since covenants could restrict your rights, you may wish to hire an Ann Arbor, Michigan lawyer to review any documents. They will be able to negotiate further changes to the covenant, and can draft an entirely new one that is acceptable to all parties if needed. An attorney can also give valuable advice when it comes to suing employees for breaching covenants, or counseling employees who have signed one regarding whether they can accept a different job.
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