§ 1. Governing Statutory & Common Law Authority
The enforceability of non-competition agreements in Michigan is governed by MCL § 445.774a. Non-competes enforceable if reasonable under the Michigan Antitrust Reform Act. Must be reasonable in duration, geography, and scope.
§ 2. Compensation Threshold Requirements
Michigan does not impose a minimum salary threshold for non-compete enforceability. This means non-competes may be enforced against employees at any income level, including hourly and part-time workers.
§ 3. Temporal Limitations on Post-Employment Restrictions
Michigan does not codify a maximum duration. Courts look at reasonableness; typically 1-3 years depending on industry. In practice, 1-2 years is generally considered the outer limit of reasonableness, though outcomes vary significantly based on the employee's role and access to trade secrets.
§ 4. Judicial Modification (Reformation Doctrine)
Michigan follows the reformation doctrine, granting courts broad authority to rewrite overbroad non-compete terms. This is the most employer-favorable approach — even a poorly drafted agreement may be reshaped into an enforceable restriction.
§ 5. Consideration & Contract Formation
Continued employment may not be sufficient; some courts require additional consideration for existing employees. Whether this is legally sufficient — especially for agreements presented mid-employment rather than at hiring — is frequently contested.
§ 6. Effect of Involuntary Termination
Courts consider circumstances of termination. Courts may apply heightened scrutiny when the employer initiated the termination, particularly for termination without cause or mass layoffs.