Work · Non-Compete Agreements
Are Non-Competes Enforceable in Michigan?
Whether an employee non-compete holds up in Michigan, any income threshold that voids one, the exceptions and carve-outs, and how the state compares after the 2024 to 2025 changes. Cited to the statute or the controlling law.
The rules and exceptions in Michigan
What makes a non-compete enforceable here, when it is void, and the carve-outs for particular workers or agreements.
MCL 445.774a was read verbatim and is settled state law. The status of the federal FTC non-compete rule is contested, so confirm the current federal posture before relying on any statement that non-competes are or are not banned nationally.
| The rule in this state | What it means |
|---|---|
| It must protect a real business interest | MCL 445.774a(1) permits an agreement that protects an employer’s reasonable competitive business interests. A covenant that protects nothing beyond the employer’s wish to avoid competition does not meet the threshold. |
| Three axes of reasonableness | The agreement must be reasonable as to its duration, its geographical area, and the type of employment or line of business it restricts. Those are the three axes the statute names by hand. |
| It must be express | The statute reaches an agreement that expressly prohibits an employee from engaging in employment or a line of business after termination of employment. The restriction has to be spelled out, not implied. |
| Date threshold | MCL 445.774a(2) applies the section to covenants and agreements entered into after March 29, 1985, the date the current statutory authorization took effect. |
| Exceptions and carve-outs | What it means |
|---|---|
| No carve-outs in the section | MCL 445.774a contains no industry carve-out, no wage-level exemption, and no occupational exclusion. The section is only two subsections long and decides the topic on its own face. |
| Agreements before March 29, 1985 | By its own terms the section governs only covenants entered into after March 29, 1985. Older agreements fall outside this authorization, a gap left when the 1984 antitrust reform briefly repealed the prior prohibition. |
What you can do right now
Concrete, neutral steps if you signed or were asked to sign a non-compete in Michigan. This is legal information, not legal advice.
- Test the clause against the three axes
A Michigan non-compete has to be reasonable in duration, geographic area, and the type of work it blocks, and it must protect a genuine business interest. Measure any clause against all three before assuming it holds or fails.
- Expect a court to trim, not toss
If a term is unreasonable, MCL 445.774a(1) lets a court narrow it and enforce the narrowed version. Do not assume an overbroad Michigan clause is simply void, as it might be in some other states.
- Do not take trade secrets or client files
Whatever the non-compete says, taking the employer’s confidential information is a separate wrong. Leave trade secrets and client lists behind.
- Talk to a Michigan employment lawyer
Because a court can reform rather than reject an overbroad clause, the realistic outcome of a Michigan non-compete is often a narrowed restriction. A licensed Michigan attorney can estimate where the line will fall.
This is general legal information, not legal advice. A non-compete is different from an NDA or a non-solicitation clause, and enforceability turns on the specific facts, so confirm your situation with a licensed attorney.
What Michigan workers get wrong about non-competes
Michigan takes the plain-statute route on non-competes, and it lands in the opposite place from North Carolina on the question that matters most. MCL 445.774a(1) says an employer may obtain a covenant that protects a reasonable competitive business interest and expressly prohibits an employee from competing after termination, provided the covenant is reasonable in its duration, its geographical area, and the type of employment or line of business it restricts. Those three axes are the whole test the statute names. The decisive sentence comes next: to the extent any such agreement is found unreasonable in any respect, a court may limit it to make it reasonable and specifically enforce it as limited. That is reformation, the direct opposite of North Carolina’s strict blue pencil. A Michigan employer who overreaches faces judicial trimming, not the loss of the entire clause, which changes the risk of drafting aggressively. The section carries no industry or wage carve-out and applies to agreements entered into after March 29, 1985, a date left over from a brief window when the 1984 antitrust reform had repealed the older prohibition. The 2024 federal FTC ban was set aside by a court and is not in effect, so this remains Michigan law.
Common questions
Are non-compete agreements enforceable in Michigan?
Yes. MCL 445.774a(1) authorizes them so long as they protect a reasonable competitive business interest and are reasonable in duration, geographic area, and type of employment.
Can a Michigan court rewrite an overbroad non-compete?
Yes. MCL 445.774a(1) expressly lets a court limit an unreasonable agreement to make it reasonable and then enforce it as limited. That is the opposite of North Carolina’s strict blue-pencil rule.
What makes a Michigan non-compete reasonable?
The statute names three axes: duration, geographical area, and the type of employment or line of business. The covenant must also protect a genuine competitive business interest, not just the wish to avoid competition.
Did the FTC ban on non-competes change the Michigan answer?
No. The 2024 FTC rule was set aside by a federal court and is not in effect. Enforceability in Michigan is still governed by MCL 445.774a.
Not legal advicePlainStatute provides plain-language summaries of public law for general information only. This is not legal advice. Statutes change; always confirm current requirements with the official source linked above before acting.