Is a non compete enforceable in Michigan?

Asked about 2 years ago - Bay City, MI

I have a non compete with a company in Bay City Michigan selling car accessories. A competior in the Detroit area is offering me a job doing the same thing to the same customers. It is for more money but can I get around the non compete or will they take me to court?

Attorney answers (3)

  1. James P. Frederick

    Contributor Level 20

    18

    Lawyers agree

    1

    Answered . There are a number of different issues in your situation.

    First, no attorney can tell you what your rights and obligations are under the terms of your contract without first examining your contract. There may be provisions which define the market (likely), set forth damages, and contain other important considerations.

    Having said that, I would question whether or not you are dealing with the same customers in Bay City and Detroit. If you are, then it seems likely that the contract provisions would prevent you from competing. If it is in fact a different market entirely, which seems likely to me, given the distance of 100 miles or more, then the contract may not bar you from acting.

    Second, you have signed a contract and are morally and ethically bound, if not legally, to honor its terms. Can you and your new employer live with the knowledge that you are breaching the agreement, just to make more money? What happens if you leave the current employer, only to find that things do not work out in Detroit? Even if they do not come after you, you are going to be burning some bridges in Bay City.

    Non-compete agreements ARE enforceable in Michigan, provided the terms are reasonable and are not otherwise voidable for public policy reasons. Whether or not your employer takes you to court is harder to say. In many (most?) of these kinds of cases, the non-compete language is used as a deterrent, to prevent valuable employees from going elsewhere. The provisions are not actually used, because it may not be worth it to the employer to actually take you to court. (They are in the business of selling cars, not suing employees). But you should not rely on that as a 100% guarantee that they will not come after you. If they have paid money for training or schooling, if they have a proprietary sales process that they want to protect, or if there is a chance that you will cost them a significant portion of their business; all of these kinds of things are reasons why they might go after you. Only you can judge whether this is likely in your particular situation.

    If the contract's damage provisions are not excessive, then it may be worth the gamble, particularly if you do not believe the employer will chase after you in Detroit. It still would not hurt to have an attorney review the contract.

    Best of luck to you!

    James Frederick

    I am licensed to practice law in the State of Michigan and have offices in Wayne and Ingham Counties. My practice... more
  2. Benjamin I. Hirsch

    Contributor Level 12

    9

    Lawyers agree

    Answered . The above attorneys are both correct and both give solid advice. I would only add that the requirement in a non compete agreement that it be reasonable has two aspects, the first that it be for a reasonable period of time (usually a year), the second is that it be for a reasonable geographic area. Given, however that you're apparently going after the same customers, there will most likely be a problem. Either way, your best bet is to take it to an attorney and have them review the document and the new contract for the Detroit company and render you an opinion that way.

    The information provided is based solely on the general information given and should not be construed as legal... more
  3. Erika McNamara

    Contributor Level 10

    8

    Lawyers agree

    Answered . Yes non-compete agreements are enforceable in Michigan.

    Yes you can “get around” the non-compete clause in your contract. However, you will have to negotiate the terms of this agreement with your current employer. A “pay-to-play” clause may be added to the current contract. This is an agreement in which you agree to give a certain percentage of the earnings you receive from your work with the competitor to your former employer. But, you must contact an attorney to assist you with this issue, because as already stated it is difficult to assess the entire non-compete agreement without reading the entire document.

    Your current employer may take you to court----there again is a lot to weigh in these types of cases, you must speak with an attorney.

    The above answer is only for reference and general information only. An Attorney-Client relationship is not... more

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