Michigan Non-Compete Agreement
Michigan enforces reasonable employee non-compete agreements under MCL 445.774a. Courts can narrow an overbroad clause. Attorney review available.
Introduction
Under a non-compete agreement an employee agrees not to compete with the business after leaving, and Michigan folds the rule into its Antitrust Reform Act (MCL 445.774a), enforcing a covenant that guards a reasonable competitive interest and letting a court narrow an overbroad one. Michigan enforces employee non-competes, but only when they are reasonable. Under the Michigan Antitrust Reform Act, MCL 445.774a(1), an employer may obtain a covenant that protects the employer's reasonable competitive business interests and prohibits post-employment competition, so long as the agreement is reasonable as to its duration, geographical area, and the type of employment or line of business. Michigan is a statutory blue-pencil state: if a court finds a covenant unreasonable in any respect, it may limit the agreement to make it reasonable and specifically enforce it as limited, rather than voiding it. There is no salary or wage threshold in Michigan, so a reasonable non-compete can apply regardless of what the worker earns. Courts in Michigan generally look at whether the restraint is tied to a genuine competitive interest, such as trade secrets, confidential information, or customer relationships, and whether its length and territory match the employee's actual role. Employers often pair a non-compete with a confidentiality agreement under the Michigan Uniform Trade Secrets Act (MCL 445.1901 to 445.1910). This page explains Michigan's rule and offers a template scoped to the state's reasonableness limits. It is a state-law overview, not a promise that any given clause will hold up.
Key Things to Know
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A non-compete stops a former employee from competing with the business for a set time and area. Under Michigan's Antitrust Reform Act, MCL 445.774a, it holds up only when reasonable in duration, geographic area, and line of work.
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Michigan enforces non-competes under the Michigan Antitrust Reform Act, MCL 445.774a(1): an employer may obtain a covenant that protects the employer's reasonable competitive business interests if it is reasonable as to duration, geographical area, and the type of employment or line of business.
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Michigan has no salary or income threshold for a non-compete. A reasonable restraint can apply regardless of how much the employee earns; do not rely on another state's wage floor when the worker is in Michigan.
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The restraint must be reasonable in three ways: how long it lasts, the geographic area it covers, and the type of work or line of business it restricts. Courts in Michigan generally accept durations tied to the employer's real competitive interest and the employee's role and territory.
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MCL 445.774a imposes no advance-notice or separate-payment requirement before signing. Courts in Michigan generally treat continued at-will employment or an offer of new employment as adequate consideration, though a clearly worded written agreement is prudent.
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Michigan is a blue-pencil (reformation) state: if a court finds a covenant unreasonable in any respect, MCL 445.774a(1) lets it limit the agreement to make it reasonable and enforce it as limited, rather than throwing the whole clause out.
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Whether or not a non-compete applies, Michigan employers protect confidential information through a confidentiality or trade-secret agreement under the Michigan Uniform Trade Secrets Act (MCL 445.1901 to 445.1910).
Key decisions before you file
Before you file a Non-Compete Agreement in Michigan, a few decisions shape the document: which option to choose and what each one means. The Non-Compete Agreement guide walks through them.
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Michigan Requirements for Non-Compete Agreement
In Michigan a reasonable employee non-compete is enforceable. Under the Michigan Antitrust Reform Act, MCL 445.774a(1), an employer may obtain a covenant that protects the employer's reasonable competitive business interests and prohibits post-employment competition, so long as it is reasonable as to its duration, geographical area, and the type of employment or line of business.
Michigan has no salary or income threshold that governs whether a non-compete is valid. Unlike states that only permit non-competes above a wage floor, MCL 445.774a ties enforceability to the reasonableness of the restraint, not the employee's pay. Do not rely on any other state salary figure when the worker is in Michigan.
MCL 445.774a(1) requires a Michigan non-compete to be reasonable as to its duration, its geographical area, and the type of employment or line of business it restricts. Courts in Michigan generally uphold durations tied to the employer's real competitive interest and the employee's role and territory, and are skeptical of broad or open-ended restraints untethered to where the employee actually worked.
A Michigan non-compete must protect the employer's reasonable competitive business interests, such as trade secrets, confidential information, specialized training, or customer goodwill (MCL 445.774a(1)). A restraint that merely blocks ordinary competition, without guarding a genuine interest, is at risk of being narrowed or not enforced.
Michigan is a statutory blue-pencil, or reformation, state. MCL 445.774a(1) provides that if a court finds a covenant unreasonable in any respect, it may limit the agreement to render it reasonable in light of the circumstances and specifically enforce it as limited. An overbroad Michigan non-compete may be narrowed and enforced in part rather than voided entirely.
MCL 445.774a imposes no advance-notice or separate-payment requirement before an employee signs. Courts in Michigan generally treat continued at-will employment, or an offer of new employment, as adequate consideration for a non-compete. A clearly worded written agreement supported by identifiable consideration reduces the risk of a later dispute over whether it is binding.
Whether or not a non-compete applies, Michigan employers protect confidential information with a confidentiality or non-disclosure agreement and the Michigan Uniform Trade Secrets Act (MCL 445.1901 to 445.1910). This protects trade secrets and customer data without restricting where a former employee may work, so employers often pair it with, or use it instead of, a non-compete.
The 2024 Federal Trade Commission non-compete rule was set aside by a federal court before it took effect, so it is not currently binding, and its status remains unsettled. Michigan does not depend on it: MCL 445.774a independently governs employee non-competes in Michigan, so reasonable restraints remain enforceable here regardless of what happens with the federal rule.
Frequently Asked Questions
Yes, when they are reasonable. Under the Michigan Antitrust Reform Act, MCL 445.774a(1), an employer may obtain a covenant that protects the employer's reasonable competitive business interests and prohibits post-employment competition, so long as it is reasonable as to its duration, geographical area, and the type of employment or line of business. A non-compete that is not tied to a genuine competitive interest, or that sweeps far wider than the employee's actual role, is at risk of being narrowed or not enforced.
Michigan sets no fixed statutory time limit. MCL 445.774a(1) requires only that the duration be reasonable in light of the circumstances. In practice, courts in Michigan generally uphold durations in the range of six months to three years when the length is tied to the employer's real competitive interest and the employee's role and territory. A longer or open-ended restraint faces a higher risk of being narrowed by a court or found unreasonable.
No. Michigan has no wage or income floor that a worker must earn before a non-compete can apply, unlike a number of other states that permit non-competes only above a salary threshold. Under MCL 445.774a, enforceability turns on whether the restraint is reasonable and protects the employer's reasonable competitive business interests, not on the employee's pay. Do not import another state's dollar threshold when the worker is employed in Michigan.
Yes. Michigan is a statutory blue-pencil, or reformation, state. MCL 445.774a(1) provides that if a court finds a covenant unreasonable in any respect, it may limit the agreement to render it reasonable in light of the circumstances and specifically enforce it as limited. That means an overbroad Michigan non-compete may be narrowed and enforced in part rather than struck down entirely, though a court is not required to reform every flawed clause.
Under MCL 445.774a(1), a Michigan non-compete must protect the employer's reasonable competitive business interests and be reasonable in three ways: its duration, its geographical area, and the type of employment or line of business it restricts. Courts in Michigan generally look at whether the restraint guards something real, such as trade secrets, confidential information, or customer goodwill, and whether its length and territory match the employee's actual job rather than blocking work far beyond it.
Not under the statute. MCL 445.774a imposes no separate-payment or advance-notice requirement before an employee signs a non-compete in Michigan. Courts in Michigan generally treat continued at-will employment, or an offer of a new job, as adequate consideration for the covenant. Even so, a clearly written agreement supported by identifiable consideration reduces the risk of a later dispute over whether the non-compete is binding.
They use a confidentiality or non-disclosure agreement and rely on the Michigan Uniform Trade Secrets Act, MCL 445.1901 to 445.1910, which lets a business protect and sue over the misuse of trade secrets. This route protects confidential information and customer data without restricting where a former employee can work, so Michigan employers often pair it with, or use it instead of, a non-compete.
No. In 2024 the Federal Trade Commission issued a rule that would have banned most non-competes nationwide, but a federal court set it aside before it took effect, so it is not currently in force and its status has remained unsettled. Either way, Michigan's own statute, MCL 445.774a, continues to govern here, so reasonable employee non-competes remain enforceable in Michigan regardless of the federal rule's fate.