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  1. #1
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    Apr 2008
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    Default Michigan Non-Compete, Non-Solicitation

    My question involves employment and labor law for the state of: Michigan.

    Before I began working for my current employer (5+ years ago) I willfully signed an employment agreement that included a very broadly defined 6 year non-compete agreement as well as a very broadly defined 6 year non-solicitation agreement. During my tenure, yet completely unrelated to my work, I made friends with a lead developer at a local, non-competing company which happened to be one of my employer's clients. It turns out his company bought some computer hardware through my company, and me being a software developer I had nothing to do with this.

    About 2 months ago this friend of mine contacted me about a position opening at his company and asked if I was interested. I told him that I was, but I had a non-solicitation agreement preventing me from working for ANY of my employer's clients along with the standard non-compete agreement. He said that it wouldn't matter since I never worked on any projects for his company and that his company is not a competitor to my current company.

    So is it true? I am not very worried about the non-compete agreement since the company is not a competitor in the marketplace, at all. Since I never worked on any of the projects or sales for his company am I bound by the non-solicitation agreement? Does it make any difference at all that I had nothing to do with this client through my current company? Either way, what should my next steps be?

  2. #2
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    Jul 2006
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    Default Re: Michigan Non-compete, Non-solicitation

    Only a court can tell you if it is binding.

    But a six year term seems awfully long to me.

    Also, what is the geographic area covered?

    Bottom line: Talk to your current employer and get the agreement waived; if you can't do that, then it's up to you to take a chance.

  3. #3
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    Default Re: Michigan Non-compete, Non-solicitation

    Geographic area is "Southeastern Michigan", which also is a very broad definition.

    My employer has already refused to nullify the contract, not on legal grounds or protection of business interests, but because he just doesn't want me to leave because he thinks I'm a valuable employee who earns him a lot of money. That's a paraphrase, but an accurate one.

    Personally, I don't see how a court could conclude that that is a legitimate business interest. I'm just hoping to get some people wiser than me to agree before I do anything drastic.

  4. #4
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    Default Re: Michigan Non-compete, Non-solicitation

    Quote Quoting dantheman25
    View Post
    ...

    Personally, I don't see how a court could conclude that that is a legitimate business interest. I'm just hoping to get some people wiser than me to agree before I do anything drastic.

    ...


    You don't say what business you are in.

    But, anyway, I think the clause is unreasonable.

    Except I ain't your judge!

  5. #5
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    Default Re: Michigan Non-compete, Non-solicitation

    I did say that I am a software developer, and I work for an IT consulting company that provides hardware sales, IT/networking and software programming services. The company I would be moving to is involved in chemical engineering. As I've said, it's not really the non-compete clause that I'm worried about, it's the non-solicitation clause that states that I cannot work for ANY of my employer's clients, regardless of my non-association with them through any work-related channels. Also, I did not solicit this client for a job, they contacted me, and they approached me through a contact I met in April of last year completely unrelated to my or his work.

    I have read the relevant statute for non-competes in Michigan, however, I have not been able to find the relevant statue under Michigan law that describes a valid non-solicitation agreement. Does such a statute exist, and if not, how is such an agreement enforceable?

  6. #6
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    Default Re: Michigan Non-compete, Non-solicitation

    Only a Michigan attorney can tell you if any given agreement is enforceable or not. If you are looking for a statute that specifies THIS is enforceable and THIS is not and defines what is considered reasonable, there isn't one.

  7. #7
    Join Date
    Feb 2008
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    Default Re: Michigan Non-compete, Non-solicitation

    You might check out : http://www.detroitchamber.com/detroi...d=7&detcid=365 for some basics on NCA in MI.

    "In Michigan, the validity of noncompete agreements is governed by section 4a of the Michigan Antitrust Reform Act, a statute passed by the Legislature in 1987, as well as the many cases interpreting that statute. Together, the statute and the case law set forth the parameters defining those agreements that are enforceable and those that are not.

    The statute seeks to strike a compromise between the protection of an employer’s competitive business interests and an employee’s right to earn a living. As such, courts interpreting noncompete agreements focus their analysis in four areas:

    (1)The agreement must protect a company’s reasonable competitive business interest. Among the pertinent factors in determining whether the agreement protects a reasonable competitive business interest are the employee’s position in the company, and the level and amount of specific competitive information acquired during employment, which may include such areas as trade secrets or special training conferred on the employee.
    (2) The agreement must be reasonable as to the length of time the employee is prohibited from working in the line of business. The enforcement of agreements of one or two years in duration is not uncommon.
    (3) The agreement must be reasonable as to the geographic area the employer seeks to prevent the employee from working in. While the employee’s immediate area of employment would most likely be upheld as a reasonable territorial restriction, wider restrictions require a greater showing that the agreement seeks to protect the employer’s reasonable competitive business interest.
    (4) Finally, the agreement’s restrictions on the type of employment or line of business must be reasonable. Courts will look less favorably on deliberately vague, over-reaching or “blanket” agreements."

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