February 18, 2021
Owners of corporations and other business organizations want to be in a position to trust the employees that they hire and retain on a regular basis. However, in some instances, employees unfortunately use the skills and information that they learn when working for one business to the advantage of a competing business at some later date. In order to help prevent this situation from occurring, many businesses – as a condition of employment – require their employees to sign non-compete clauses. These clauses are often present in an employment contract or are found in an employee handbook that the employee receives when he or she starts working for a company.
Effective and enforceable non-compete agreements can be difficult to draft, and disputes frequently arise between employers and former employees. When that happens, it is essential that you have attorney Maxwell Goss of Maxwell Goss Law on your side. We can help you use and apply the non-compete laws in the State of Michigan to protect and serve the interests of your business.
It might surprise many corporate officers to learn that not all agreements and covenants to not compete are enforceable. In fact, courts in the State of Michigan do not uniformly enforce contractual non-compete agreements – for a variety of reasons. When that happens, company employees are freer to use the wide range of knowledge and skills that they learn at one company to benefit a direct competitor or start their own competing enterprise. An experienced attorney should always draft a non-compete agreement that will be enforceable and effective if a dispute arises at some point down the line with a former employee.
For a non-compete agreement to be effective in Michigan, there are certain requirements that must be met. First of all, the contract not to compete has to be for a reasonable period of time. In addition, any restrictions not to compete may only extend to a limited geographical area. Finally, the non-compete restrictions must apply only to certain specific types of work.
Courts will enforce these non-compete agreements when the interests of a company are properly balanced with an employee’s ability to work in his or her chosen field and choose his or her employment. However, these contracts are less likely to be enforceable if they are overly restrictive or contain unreasonable language or conditions. In those instances, the deciding court might determine that the agreement is not enforceable. In that case, an employee could lawfully take the benefits and training that he or she learned at one company and use those skills to benefit a competitor.
In addition to making sure that your non-compete agreement is enforceable, the agreement should safeguard specific business interests. For example, the agreement should be in place to protect specific trade secrets, proprietary information, training that is specialized, goodwill, and customer and client relationships. An overly burdensome agreement that does not allow an employee to seek employment in the same field is unlikely to be enforceable by a court.
In cases where an employee or former employee breaches a non-compete agreement and goes to work for an employer, giving that entity a business advantage, you might be eligible to file a breach of contract claim against the offending individual. It’s important to have the right legal assistance with filing a lawsuit against the former employee to seek damages and other legal relief. If the dispute is not able to be resolved through negotiations or alternative dispute resolution, your attorney could assist you with litigating your case in the Michigan court system and pursuing a result that favors your business entity and protects its interests from unfair competition.
Experienced attorney Maxwell Goss understands the importance of contractual non-compete clauses in employer-employee contracts. We can assist you with drafting a clear and concise non-compete agreement that will hold up in court in the event you have to enforce it. Moreover, if a dispute involving a covenant-not-to-compete arises, we can assist you with resolving the dispute in an effective and efficient manner. If the dispute cannot be resolved satisfactorily out of court, we could help you seek court intervention through the litigation process. To schedule an appointment, contact us online today.
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