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Michigan Non-Disclosure Agreement Requirements

A Non-Disclosure Agreement in Michigan is a contract in which one or both parties agree to keep specified information confidential, and MCL 445.774a, part of the Michigan Antitrust Reform Act, sets the actual test: any covenant restricting future work must be reasonable as to its duration, geographic area, and the type of employment or line of business it restricts, with a court free to narrow an unreasonable one rather than throwing it out entirely.

Introduction

A Non-Disclosure Agreement in Michigan is a contract in which one or both parties agree to keep specified information confidential, and MCL 445.774a, part of the Michigan Antitrust Reform Act, sets the actual test: any covenant restricting future work must be reasonable as to its duration, geographic area, and the type of employment or line of business it restricts, with a court free to narrow an unreasonable one rather than throwing it out entirely. A bill introduced in the legislature, House Bill 4040, would go much further and prohibit nearly all employer noncompetes, but as of this writing it remains in House committee and has not been enacted, so the reasonableness standard under MCL 445.774a is still the operative rule. A Michigan NDA is otherwise an ordinary, enforceable confidentiality contract, mutual or one-way, protecting trade secrets and other sensitive information shared between parties. Trade secrets themselves are protected separately under the Michigan Uniform Trade Secrets Act (MCL 445.1901 through 445.1910), and a misappropriation claim generally must be filed within three years of when the misappropriation was discovered or reasonably should have been. The practical effect for drafting is narrow but real: keep the confidentiality definition tied to genuine trade secrets and sensitive information rather than a blanket restriction on future work, since that is the line MCL 445.774a's reasonableness test draws.

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Key Things to Know

  1. 1

    A bill pending in the Michigan legislature, House Bill 4040, would prohibit nearly all employer-worker noncompetes outright, similar to laws already in place in California, Minnesota, North Dakota, and Oklahoma. It has not passed either chamber and has not been signed into law as of this writing, so it does not currently change how a Michigan NDA's confidentiality clause should be drafted.

  2. 2

    Michigan's noncompete statute, MCL 445.774a, lets an employer obtain a restrictive covenant from an employee only if it is reasonable as to duration, geographic area, and the type of employment or line of business, and protects only the employer's reasonable competitive business interests; a court can narrow an unreasonable covenant rather than voiding it outright. It applies only to covenants entered into after March 29, 1985.

  3. 3

    That reasonableness risk runs through the scope of the confidentiality definition, not the existence of the NDA itself. An NDA that protects genuine trade secrets and sensitive information, without functioning as a disguised restriction on future employment, is not the kind of covenant MCL 445.774a scrutinizes.

  4. 4

    Trade secret protection in Michigan runs through the Michigan Uniform Trade Secrets Act (MCL 445.1901 through 445.1910), separate from whatever the NDA itself says.

  5. 5

    A trade secret misappropriation claim in Michigan generally must be filed within three years of when the misappropriation was discovered or reasonably should have been discovered (MCL 445.1907), with a continuing misappropriation treated as a single claim rather than a series of separate ones.

  6. 6

    Michigan has no statute carving employee inventions made on personal time out of an invention-assignment clause, unlike states such as California, Delaware, Illinois, Minnesota, North Carolina, and Washington. If a Michigan NDA or related employment agreement includes an invention-assignment provision, its scope depends on the contract's own language rather than a statutory floor.

  7. 7

    Mutual NDAs, where both sides share confidential information, and one-way NDAs, where only one side does, are both ordinary enforceable contracts in Michigan; which one fits depends on whether the exchange runs both directions, like a partnership or acquisition discussion, or one direction, like pitching an investor.

Key decisions before you file

Before you file a Non-Disclosure Agreement in Michigan, a few decisions shape the document: which option to choose and what each one means. The Non-Disclosure Agreement guide walks through them.

Open the Non-Disclosure Agreement guide

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MICHIGAN NON-DISCLOSURE AGREEMENT

This Non-Disclosure Agreement is entered into by [Party A Name] of [City], Michigan and [Party B Name] of [City], Michigan, each referred to below as a "Party," on the terms set out below.

  1. Purpose. [Party A] and [Party B] anticipate exchanging sensitive information in connection with [describe business purpose, e.g., a proposed business relationship the Parties are evaluating], and this Agreement sets the terms under which that exchange stays confidential.

  2. Definition of Confidential Information. "Confidential Information" means technical, business, or financial information one Party discloses that is marked confidential or that the circumstances would lead a reasonable person to treat as confidential, including any trade secret as Michigan defines it: information deriving independent economic value from not being generally known and subject to reasonable efforts to keep it secret (Michigan Uniform Trade Secrets Act, MCL 445.1902). Excluded: information already public through no fault of the receiving Party, information already held before disclosure, information developed independently, and information a third party discloses without breaching a duty of confidence.

  3. Obligations. The receiving Party will use Confidential Information only for the purpose in Section 1, guard it with reasonable care, and withhold it from third parties without the disclosing Party's written consent, except for employees, contractors, or advisors who need it for that purpose and agree to confidentiality terms no weaker than these.

  4. Scope Limitation (Michigan-Specific). Michigan does not void noncompete-style restrictions outright the way some states do; MCL 445.774a, part of the Michigan Antitrust Reform Act, instead lets an employer obtain such a covenant only if reasonable in duration, geographic reach, and the type of employment or business restricted, and only to the extent it protects a legitimate competitive interest, with a court finding it unreasonable free to narrow rather than void it. House Bill 4040, which would prohibit most such covenants outright, remains pending in Michigan House committee as of this Agreement's drafting date and has not been enacted. Accordingly, any provision here restricting future employment or business activity, rather than protecting genuine confidential or trade secret information, reaches no further than MCL 445.774a allows, and a court is asked to narrow rather than strike it if found to exceed that scope.

  5. Federal Whistleblower Notice. Under 18 U.S.C. Section 1833(b) of the Defend Trade Secrets Act, no person is criminally or civilly liable for disclosing a trade secret in confidence to a government official or an attorney solely to report a suspected legal violation, or in a sealed lawsuit filing. This notice is included because the Act conditions certain remedies on giving it.

  6. Term. Confidentiality obligations run for [X years] from signing, though information remaining a trade secret stays protected as long as it holds that status; Michigan generally allows six years to sue for breach of this Agreement after a breach occurs (MCL 600.5807).

  7. Return or Destruction. On the disclosing Party's request, or once the Section 1 purpose concludes, the receiving Party will return or destroy every copy of the Confidential Information within its control and confirm in writing that it has done so.

  8. Remedies. Because a breach could cause harm damages alone would not fix, the non-breaching Party may seek an injunction under Michigan Court Rule 3.310, plus damages and any relief the Michigan Uniform Trade Secrets Act provides; a breach amounting to conversion of the Confidential Information separately allows recovery of three times actual damages (MCL 600.2919a). If the Parties are both businesses rather than an employer and employee, a restrictive covenant between them is judged under a common-law rule-of-reason standard, not MCL 445.774a's employment-specific framework (Innovation Ventures, LLC v. Liquid Manufacturing, LLC, 499 Mich. 491 (2016)).

  9. Governing Law. This Agreement is governed by Michigan law, which Michigan courts will apply so long as Michigan has a substantial relationship to the Parties or the transaction, or another reasonable basis supports the choice (Chrysler Corp. v. Skyline Industrial Services, Inc., 448 Mich. 113 (1995), adopting Restatement (Second) of Conflict of Laws Section 187).

  10. Miscellaneous. Signing electronically has the same effect as signing on paper here, given the Michigan Uniform Electronic Transactions Act (MCL 450.831 et seq.) and the federal ESIGN Act (15 U.S.C. Section 7001). An unenforceable provision does not drag down the rest of this Agreement. Each Party's promise of confidentiality is, by itself, enough consideration to support this Agreement, since Michigan will not treat a promise a Party already owed as consideration for a separate obligation (Yerkovich v. AAA, 461 Mich. 732 (2000)).

[Party A Signature] ____________________ Date: __________ [Party B Signature] ____________________ Date: __________

Michigan Requirements for Non-Disclosure Agreement

Definition of Confidential Information (Michigan Uniform Trade Secrets Act, MCL 445.1901 through 445.1910)

Clearly defines what constitutes confidential information under Michigan law, including trade secrets as defined by the Michigan Uniform Trade Secrets Act.

Trade Secret Protection (Michigan Uniform Trade Secrets Act, MCL 445.1902)

Addresses the specific requirements for trade secret protection under Michigan law. Section 1902 defines a trade secret as information that is the subject of efforts reasonable under the circumstances to maintain its secrecy, the basis for this row's reasonable-efforts standard.

Federal Defend Trade Secrets Act Compliance (18 U.S.C. Section 1836)

Incorporates protections under the federal Defend Trade Secrets Act, which provides additional civil remedies for misappropriation of trade secrets used in interstate commerce.

Whistleblower Immunity Notice (18 U.S.C. Section 1833(b), Defend Trade Secrets Act)

Includes the required notice that an individual may not be held liable for disclosing a trade secret in confidence to a government official or attorney to report a suspected violation of law, or in a sealed court filing, as required to preserve the disclosing party's remedies under the Defend Trade Secrets Act.

Reasonableness Standard for Commercial Restrictive Covenants (Innovation Ventures, LLC v. Liquid Manufacturing, LLC, 499 Mich. 491 (2016))

Innovation Ventures held that a Nondisclosure Agreement and related equipment agreement between two Michigan businesses were not void for lack of consideration, and that a restrictive covenant between businesses (as opposed to an employer and an employee) is evaluated under a common-law rule-of-reason standard rather than MCL 445.774a's employment-specific reasonableness framework.

Protective Orders for Compelled Disclosure (Michigan Court Rule 2.302(C))

MCR 2.302(C) is Michigan's discovery protective-order rule: on a showing of good cause, a party may obtain a court order shielding confidential material from broader disclosure, including sealing filed materials. It is the mechanism a receiving Party can invoke if compelled to produce Confidential Information in litigation, supporting a standard NDA carve-out for disclosure required by law or court order.

Remedies for Breach (Michigan Court Rule 3.310, injunctions; MCL 600.2919a, statutory conversion)

Specifies available remedies for breach, including injunctive relief under Michigan's court rule on injunctions, and treble damages under Michigan's statutory conversion provision where a breach amounts to converting the confidential information to the breaching party's own use.

Electronic Signatures Compliance (Michigan Uniform Electronic Transactions Act, MCL 450.831 et seq.; 15 U.S.C. Section 7001, E-SIGN Act)

Acknowledges the validity of electronic signatures under both Michigan and federal law.

Non-Solicitation Provisions (Michigan Antitrust Reform Act, MCL 445.771 et seq. and MCL 445.774a)

Reasonable restrictions on soliciting employees or customers, drafted in compliance with Michigan's reasonableness standard for restrictive covenants, which extends to non-solicitation covenants as well as pure noncompetes.

Data Privacy Compliance (Michigan Identity Theft Protection Act, MCL 445.71 et seq.; federal laws as applicable, HIPAA, GLBA)

Addresses handling of personal information in compliance with Michigan's identity theft protection and data security standards and applicable federal regulations, when confidential information includes personal data.

Consideration (Yerkovich v. AAA, 461 Mich. 732 (2000))

Explicitly states the consideration provided in exchange for confidentiality obligations. Michigan's preexisting-duty rule, established in Yerkovich, holds that a promise to do what a party is already legally bound to do is not valid consideration for a new promise.

Equitable Relief (Michigan Court Rule 3.310; Michigan common law on equitable remedies)

Acknowledges that monetary damages may be insufficient for a confidentiality breach and that equitable remedies, including injunctive relief, may be sought, consistent with Michigan equity principles.

Disclosure to Representatives (Michigan common law of agency; Michigan Uniform Trade Secrets Act, MCL 445.1902)

Provisions governing disclosure to employees, agents, and representatives, including the requirement to bind such persons to confidentiality obligations no weaker than the Agreement's own, consistent with the reasonable-secrecy-efforts standard in Michigan's trade secret definition.

Statute of Limitations (MCL 600.5807)

Addresses the time period within which a breach-of-contract claim over this Agreement must be brought. Michigan sets a six-year limitations period for actions on a written contract.

Integration Clause (UAW-GM Human Resource Center v. KSL Recreation Corp., 228 Mich. App. 486 (1998))

States that the Agreement constitutes the entire understanding between the parties regarding confidentiality. This case holds that a merger or integration clause bars parol evidence of terms not included in the written agreement, except in narrow fraud or incompleteness circumstances.

Waiver Provisions (Quality Products and Concepts Co. v. Nagel Precision, Inc., 469 Mich. 362 (2003))

Clarifies that failure to enforce a provision does not itself waive it. This Michigan Supreme Court case holds that parties may still mutually waive or modify a contract despite a written anti-waiver clause, given the parties' freedom to contract.

Frequently Asked Questions

A Non-Disclosure Agreement in Michigan is an ordinary contract in which one or both parties agree to keep specified information confidential. It can be mutual, where both sides share confidential information, or one-way, where only one side does. Trade secrets shared under the agreement are also separately protected by the Michigan Uniform Trade Secrets Act (MCL 445.1901 through 445.1910) regardless of what the NDA itself says.

It can, but MCL 445.774a limits how far it can go. An employer may obtain a covenant restricting an employee's future employment or line of business only if the covenant is reasonable as to duration, geographic area, and the type of employment or line of business, and only to the extent it protects the employer's reasonable competitive business interests. A court that finds a covenant unreasonable can narrow it to a reasonable scope and enforce it as narrowed, rather than voiding it outright the way California does.

Not yet. House Bill 4040, introduced in the Michigan legislature in January 2025, would prohibit nearly all employer-worker noncompetes, but it has not passed either the House or the Senate and has not been signed into law. Until it is enacted, MCL 445.774a's reasonableness test remains the controlling standard for any Michigan NDA whose confidentiality definition functions as a restriction on future work.

A trade secret misappropriation claim under the Michigan Uniform Trade Secrets Act generally must be brought within three years after the misappropriation is discovered, or after it reasonably should have been discovered with reasonable diligence (MCL 445.1907). A separate breach-of-contract claim over the NDA itself follows Michigan's ordinary written-contract limitations period.

There is no Michigan statute automatically excluding personal-time inventions from an assignment clause, unlike California, Delaware, Illinois, Minnesota, North Carolina, and Washington, which all have such carve-outs. In Michigan, whether an NDA or employment agreement's invention-assignment language reaches a personal-time invention depends on how that provision is written and how a court interprets its scope, not on a statutory floor.

It depends on whether confidential information will flow in both directions or only one. A mutual NDA fits a two-way exchange, such as a merger, partnership, or joint-venture discussion where both sides disclose sensitive information. A one-way NDA fits a one-directional exchange, such as pitching a business plan to an investor who is not sharing anything confidential back. Both forms are equally enforceable in Michigan; the choice is about which structure matches the actual relationship.

No. A Michigan NDA is an ordinary contract, not a formal instrument like a will or power of attorney, so it does not require notarization or witnesses to be valid. It only needs the standard elements of a valid contract: an offer, acceptance, and consideration, along with signatures from the parties being bound.

The non-breaching party can seek injunctive relief to stop an ongoing or threatened disclosure, along with damages caused by the breach. If the disclosed information also qualifies as a trade secret, the Michigan Uniform Trade Secrets Act provides an additional, independent basis for relief, including damages for actual loss and unjust enrichment, separate from whatever remedies the NDA itself specifies.