Michigan Business Lawyer Blog

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. This type of information is protected by the Michigan Uniform Trade Secrets Act and Michigan common law. The issue is also easier if the former employee was an important part of the company, such as a key member of management, since such people often have continuing fiduciary duties to their ex-employers.

Regardless of the particular circumstances involved, 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.

Posted by Michael J. Hamblin | Permalink | Email This Post

Posted In: Non-Compete Agreements

Bookmark:

We've all heard the horror stories about businesses entrusting sensitive and private company information to employees, only to have those employees leave the company and use its sacred data to compete against the very company who provided it to them. This type of event can have a devastating effect on small businesses. It is important for any business that wants to keep its competitive advantage to take the appropriate steps to protect its proprietary information and trade secrets from departing employees.

Protecting a business's information when an employee leaves doesn't start when that employee leaves. Rather, it starts when the employee first hires in by requiring them to sign a non-compete agreement. Requiring employees to sign a non-compete agreement when the employee joins the company can provide a high level of protection by limiting that employee's ability to make competitive use of the company's important information after they leave the company.

But, it is important to have a competent Michigan business lawyer prepare the non-compete agreement so that it complies with Michigan law and provides the expected level of protection. Agreements that overreach in breadth and scope may be enforced on a limited basis or may be invalidated entirely.

Michigan non-compete agreements are subject to the Michigan Antitrust Reform Act and state and federal case law interpreting that statute. Under this law, in order to be enforceable, non-compete agreements must (1) be designed to protect an employer's reasonable competitive business interests; (2) have a reasonable duration; (3) have a reasonable geographic scope; and (4) prohibit competition only in a clearly defined line of business.

Properly prepared and implemented non-compete agreements can provide the basis for obtaining an injunction prohibiting an ex-employee from using a business's information against it. This remedy provides a business with a powerful remedy to protect its competitive business interests against dishonest ex-employees who would otherwise seek to unfairly compete with their former employers.

Posted by Michael J. Hamblin | Permalink | Email This Post

Posted In: Employment Law , Non-Compete Agreements

Bookmark: