Noncompete disputes in Michigan
I am Mitchell Bisson, a Grand Rapids business litigation lawyer. I have litigated for over 15 years. A noncompete can decide whether someone keeps a job, a client list, or a business. This page covers noncompete and non-solicitation questions in Michigan, including enforceability, overly broad restrictions, agreements between businesses, what happens after a firing, the FTC rule, and injunctions. I act for either side, employers and employees, and for businesses on both sides of a restrictive covenant. The short answers below come from my Michigan legal library.
A Kent County noncompete dispute usually starts with a resignation. A salesperson, engineer, advisor or manager gives notice, and within days the employer sends a letter citing the agreement. Or the employee has a new offer in hand and the letter arrives before the first day. Sometimes the first paper is a motion for a temporary restraining order. The test is in MCL 445.774a(1): the covenant has to protect the employer’s reasonable competitive business interests, and it has to be reasonable as to duration, geographical area, and the type of employment or line of business. If it is unreasonable in any respect, a court may limit it and specifically enforce it as limited.
Time matters more here than in most contract cases. Most breach of contract damages claims have a six-year limit under MCL 600.5807(9), but a noncompete can run for a year or less, and a motion for a preliminary injunction can decide the practical outcome in weeks. In Thermatool Corp. v. Borzym, 227 Mich. App. 366, 375-376 (1998), the Court of Appeals held that in appropriate circumstances a court may extend the term of a noncompete beyond its stated expiration date. I read the agreement, count the days since the resignation, and decide whether to move for an injunction or how to oppose one.
I checked two developments for this page. The FTC’s nationwide noncompete rule is no longer on the books, and several bills in the Michigan House would change the statute but none has become law. I act for employers, employees and businesses on both sides of a restrictive covenant. Nothing here predicts how your case will end, and I do not promise outcomes.
Michigan noncompete rules, tests and remedies
These are the rules in the statutes and the case law. How they apply to you depends on the exact clause, the job and the dates.
| Claim or issue | What must be shown | Time limit or key rule | Authority |
|---|---|---|---|
| Employee noncompete | A covenant between an employer and an employee that protects a reasonable competitive business interest | Must be reasonable as to duration, geographical area, and the type of employment or line of business; applies to covenants entered into after March 29, 1985 | MCL 445.774a(1)-(2); St. Clair Medical, P.C. v. Borgiel, 270 Mich. App. 260, 265-267 (2006) |
| Overbroad covenant | A covenant that is unreasonable in some respect | A court may limit it to render it reasonable and enforce it as limited, so it is not automatically thrown out | MCL 445.774a(1); Rooyakker & Sitz, PLLC v. Plante & Moran, PLLC, 276 Mich. App. 146, 158-159 (2007) |
| Who proves what | The employer shows the covenant is valid when the employee challenges it | The party seeking enforcement has the burden of demonstrating validity | Coates v. Bastian Brothers, Inc., 276 Mich. App. 498, 508 (2007) |
| Client nonsolicitation | A clause barring a former employee from soliciting or serving the former employer’s clients | A two-year client clause with no stated territory was held reasonable under the statute | Rooyakker, 276 Mich. App. at 157-159 |
| Noncompete between businesses | The parties are businesses, not an employer and an employee | Judged under the rule of reason, not the employee statute | MCL 445.772; Innovation Ventures, LLC v. Liquid Manufacturing, LLC, 499 Mich. 491, 513-515 (2016) |
| Preliminary injunction | Harm to the public interest, balance of harm, likelihood of success and irreparable injury | A breach alone does not establish irreparable injury; a restraining order without notice lasts no more than 14 days unless extended | Thermatool, 227 Mich. App. at 376-377; MCR 3.310(A)-(B) |
| Remedy after a breach | A breach of a reasonable covenant | A court may specifically enforce it and, in appropriate circumstances, extend its term | Thermatool, 227 Mich. App. at 375-376 |
What an employer has to prove to enforce a noncompete
The agreement and its date. The statute covers an employer’s agreement that “expressly prohibits an employee from engaging in employment or a line of business after termination of employment,” and it applies to covenants entered into after March 29, 1985 (MCL 445.774a(1)-(2)). I start with the signed document, any later amendment and the date each was signed.
A protectable interest. In St. Clair Medical, 270 Mich. App. at 266, the Court of Appeals said an employer’s interest has to be greater than merely preventing competition. The covenant has to protect against the employee gaining an unfair advantage in competition, and it cannot bar the employee from using general knowledge or skill. The court found fact questions about whether the covenant protected confidential patient lists or an investment in training, but it held that the covenant protected the employer’s interest in its patient goodwill and advertising spending (id. at 267-269). In Rooyakker, 276 Mich. App. at 158, the court recognized, quoting a federal district court decision, that preventing the anticompetitive use of confidential information is a legitimate business interest.
Reasonable terms. Beyond duration, geography and type of work, St. Clair Medical adds that a covenant must be reasonable as between the parties and must not be specially injurious to the public (270 Mich. App. at 266). In Coates, 276 Mich. App. at 508, the court held a one-year clause reasonable as a matter of law, given its limited duration, its modest geographic scope and the length of the employee’s employment. I measure each of the three statutory terms against what the employee actually did for the company.
A breach. The covenant is read by its words. In St. Clair Medical, the clause barred practice within seven miles of either of two clinics, and the court read it to apply without regard to where the employee performed most of his services (270 Mich. App. at 265). I compare the clause to the new job, the new clients and the timeline.
Defenses and answers I look at in a noncompete case
No protectable interest, or only general skill. If the employer cannot tie the covenant to confidential information, client goodwill it built or training it paid for, the covenant starts weak. That is the point of St. Clair Medical, 270 Mich. App. at 266-268.
Overbreadth, with a warning. Employees sometimes assume a broad covenant will fall apart. The statute lets a court limit an unreasonable covenant and enforce it as limited (MCL 445.774a(1)). In Rooyakker, 276 Mich. App. at 158-159, a client clause that named no geographic area was held reasonable, in part because the statute lets a court limit a covenant to make it reasonable. Employers should not count on a judge to fix an overreach either, so I look at how narrow the clause is as written.
The employer’s burden. The party seeking enforcement has to demonstrate validity (Coates, 276 Mich. App. at 508). In Brooklyn Outdoor, LLC v. Vanderbush, No. 375401 (Mich. Ct. App. Apr. 22, 2026) (unpublished), the Court of Appeals vacated an order that treated an employer’s failure to answer a reasonableness challenge as a concession, because an earlier remand called for a full reasonableness analysis. An unpublished opinion is not precedentially binding under MCR 7.215(C)(1), and I cite it only to show how courts are handling the question now.
The employer breached first, or fired the employee. In Coates, a jury found the employer first breached by firing the employee without cause, yet the court enforced the covenant. It held the argument unpreserved and, alternatively, that the clause applied “regardless of the reason for termination of employment,” so the parties had opted out of the first-breach rule (276 Mich. App. at 510, 513). The court also questioned the continued viability of the first-breach doctrine (id. at 513). I read every clause for that wording, and I do not build a defense on first breach alone.
The wrong label, or the wrong standard. Courts look at what a clause does. In Rooyakker, the employees argued a client solicitation clause was really a noncompete, and the court held it reasonable regardless of its title (276 Mich. App. at 157). And a noncompete between two businesses is not judged under the employee statute, as the next sections explain.
Injunctions, extensions and damages
The injunction fight. A court weighing a preliminary injunction considers harm to the public interest, whether the applicant’s harm without relief outweighs the other side’s harm if relief is granted, the likelihood of success on the merits, and whether the applicant will suffer irreparable injury (Thermatool, 227 Mich. App. at 376). Under MCR 3.310, a preliminary injunction may not be granted before a hearing, the party seeking relief has the burden at a show cause hearing, a restraining order granted without notice requires a showing of immediate and irreparable injury and expires within a time the court sets, not to exceed 14 days, unless extended, and the court may require security.
Irreparable injury is not automatic. In Thermatool, the court held that a breach of the contract, by itself, does not establish irreparable injury, and that economic injuries are not irreparable because damages at law can remedy them (227 Mich. App. at 377). The employer there had alleged a single sale to a known customer, and the court called the damages easily calculable (id. at 377-378). It also held the trial court erred by granting a preliminary injunction that gave the plaintiffs the relief they would get if they prevailed at trial (id. at 378). That cuts both ways. An employer needs evidence of harm money cannot measure. An employee cannot assume a breach claim alone will be enough to stop a motion.
Extension and specific enforcement. The same case holds that a court may specifically enforce a reasonable covenant and, in appropriate circumstances, extend its term beyond the stated expiration date (227 Mich. App. at 375-376). The court noted that other courts extending a covenant had faced continuous and systematic violations (id. at 378).
The customer’s choice. In Hayes-Albion Corp. v. Kuberski, 421 Mich. 170, 184 (1985), the Supreme Court said an injunction went too far when it barred the defendants from dealing with certain customers without regard to whether they were using secret processes. Courts do not always grant the whole request.
Damages. A claim for damages for breach of the covenant is a contract claim, so the six-year period in MCL 600.5807(9) applies to most such claims. In a real case, the question is usually what the former employee earned from the clients taken and what the employer can prove it lost. I ask for those numbers early.
Noncompetes between businesses
A covenant in a sale of a business, a termination agreement or a distribution deal is not necessarily an employee covenant. In Innovation Ventures, 499 Mich. at 512-515, the Michigan Supreme Court held that MCL 445.774a sets the factors for noncompetes between an employer and an employee and does not address agreements between businesses. It held that noncompete agreements between businesses are evaluated under the rule of reason, which the Michigan Antitrust Reform Act codified in MCL 445.772, and it sent the case back to the trial court to apply that standard. The rule of reason asks whether the restraint merely regulates and perhaps promotes competition, or whether it may suppress or even destroy competition. The court looks at the facts peculiar to the business, its condition before and after the restraint, and the nature and effect of the restraint.
So the first question is who the parties are and what the agreement was for. I work that out before I argue about duration or territory, because it decides which test applies.
No agreement, trade secrets and confidentiality
Without a signed covenant, a former employee is generally free to compete. In Hayes-Albion, 421 Mich. at 180-181, the Supreme Court said the employee was free to compete with his former employer using general skill or knowledge but could not use the employer’s trade secrets. It also said there is generally nothing improper in an employee establishing his own business and communicating with customers he had worked for before (id. at 183). Trade secret claims today fall under the Michigan Uniform Trade Secrets Act, which allows a court to enjoin actual or threatened misappropriation (MCL 445.1903(1)). The Act displaces conflicting tort and other Michigan law on civil remedies for misappropriation, but it does not affect contractual remedies (MCL 445.1908). So a confidentiality clause, a noncompete and a trade secret claim can all be in the same case, and I sort out which one carries which fact.
The FTC rule and pending Michigan bills
The FTC rule is gone. The U.S. District Court for the Northern District of Texas set the FTC’s Non-Compete Rule aside in Ryan, LLC v. FTC, 746 F. Supp. 3d 369 (N.D. Tex. 2024), decided August 20, 2024. On September 5, 2025, the Commission voted to dismiss its appeals and accede to the vacatur. A final rule published at 91 Fed. Reg. 6507 (Feb. 12, 2026), effective that day, removed the rule from the Code of Federal Regulations. No federal ban is in force, and a Michigan employee covenant is still tested under MCL 445.774a.
Pending Michigan bills. The text of MCL 445.774a that I read has not changed. House Bill 4040 of 2025, introduced January 30, 2025 and referred to the House Committee on Economic Competitiveness, would amend it to prohibit most noncompetes with workers, with exceptions that include sale-of-business agreements and certain nonsolicitation and confidentiality agreements (bill text). Two other House bills, 4514 (introduced May 21, 2025) and 6119 (introduced June 18, 2026), are titled as bills to prohibit certain noncompete agreements for physicians. I found no record of a committee vote or floor action on any of them, and none is law. If a covenant matters to you, the statute and the published cases are what a court will apply today.
Several recent Court of Appeals decisions I found on noncompete and nonsolicitation clauses are unpublished, so they do not bind other courts under MCR 7.215(C)(1). I rely on the published cases.
How I handle a noncompete case
- Read the documents and fix the dates. I read the covenant, the offer letter, any amendment, the compensation plan and the resignation or termination papers, and I build a timeline from the last day of work.
- Separate the interest from the conduct. For an employer, I identify the confidential information, client relationships and investment the covenant protects. For an employee, I identify what you took, what you did and whom you contacted. I keep those two lists apart.
- Respond to the demand letter on purpose. A cease and desist letter has a deadline. I decide whether to negotiate narrower terms, offer to return materials, or prepare for a motion, and I do not let the deadline pass in silence.
- Decide on a motion, or answer one. If an injunction is on the table, I prepare the evidence of harm, the affidavits and the proposed order, or the opposition to them, based on the injunction factors.
- File, serve and answer. A defendant served in Michigan has 21 days to serve and file an answer or take other action permitted by the rules, and 28 days if service is made outside Michigan or by registered mail (MCR 2.108(A)(1)-(2)). Bring me the summons the day you get it.
- Discovery, motions and trial. A motion under MCR 2.116(C) can test the claim before trial. If the case does not settle, I am prepared to try it.
Ways a noncompete dispute may end without a trial
Whether any of these is available depends on the clause, the facts and the other side. None is automatic.
Negotiated terms. Many disputes end with an agreement that narrows the restriction, sets a start and end date, lists the clients or work off limits and provides for return of company files. An agreed order or a written release can protect both sides. I read the final paper as closely as the number.
Summary disposition, arbitration or an offer of judgment. If the covenant is unreasonable as a matter of law, or plainly valid and plainly breached, a judge may decide it on motion under MCR 2.116. If the agreement has an arbitration clause, the dispute may go there. In Rooyakker, the Court of Appeals sent the employees’ challenge to a client solicitation clause to arbitration because the agreement covered claims arising from the contract (276 Mich. App. at 156-157). Until 28 days before trial, a party may also serve a written offer to stipulate to a judgment under MCR 2.405(B), which can end the case or shift actual costs.
What I need from you
Bring every agreement you signed with the company: the noncompete, the confidentiality agreement, the offer letter, bonus or commission plans, the handbook and any amendments. Bring the resignation or termination letter, any demand letter, and the new job offer if there is one. Bring your emails and texts about clients and about leaving. If you are an employer, bring the personnel file, the client list, access logs and a description of what you think was taken. Do not delete messages, wipe devices or alter documents. Do not forward company files to a personal account, and if you already did, tell me before you do anything else with them. Do not contact the former employer’s clients until I have read the covenant. Do not sign a severance release or a new agreement before I review it.
Where your Kent County noncompete case will be heard
I represent clients in Grand Rapids, Kentwood, Grandville, Wyoming and across Kent County. Under MCL 600.8301(1), the district court has exclusive jurisdiction in civil actions when the amount in controversy does not exceed $25,000. Kent County district courts include the 61st District Court in Grand Rapids, the 59th in Walker and Grandville, the 62A in Wyoming, the 62B in Kentwood and the 63rd for Rockford, Lowell, Cedar Springs, East Grand Rapids and the surrounding townships. Larger claims are filed in the Kent County Circuit Court, the 17th Judicial Circuit. Under MCL 600.8031, an action between a business enterprise and its present or former owners, managers, officers, employees or competitors can qualify as a business or commercial dispute when the claims arise out of that relationship, and the statute lists noncompete and nonsolicitation agreements among the contract disputes it covers, on the condition that available administrative remedies, including dispute-resolution processes in the agreement, are exhausted.
Why people hire me for a Michigan noncompete matter
You work directly with me, the lawyer handling your case. I give you the strengths and weaknesses of the case straight, including what it could cost you and what it could recover, and I lay out the strongest arguments the other side has. I build the case the facts support, and then we decide together how to proceed.
Fees depend on the type of case, its complexity and whether it is likely to go to trial. I explain my fee arrangement at the consultation, before you decide whether to hire me.
Questions I hear from people with a noncompete agreement in Michigan
Are employee noncompete agreements enforceable in Michigan?
They can be. MCL 445.774a lets an employer obtain an agreement that protects its reasonable competitive business interests, as long as it is reasonable as to duration, geographic area, and the type of employment or line of business. A covenant must guard against unfair competitive advantage, not bar use of general knowledge or skill.
If a noncompete is too broad, will a Michigan judge throw it out or rewrite it?
Under MCL 445.774a(1), if an employee covenant is unreasonable in any respect, a court may limit the agreement to render it reasonable in light of the circumstances in which it was made and specifically enforce it as limited. So an overbroad covenant is not automatically thrown out.
Are noncompete clauses between two businesses judged differently from employee noncompetes in Michigan?
Yes. The Michigan Supreme Court held in Innovation Ventures v Liquid Mfg that MCL 445.774a governs noncompetes between employers and employees, while a noncompete between businesses is evaluated under the rule of reason, which asks whether the restraint is unreasonable in its effect on competition.
Did the FTC ban noncompete agreements, and does that change my Michigan noncompete?
No. The FTC’s Non-Compete Rule never took effect. In Ryan LLC v FTC, a Texas federal court set the rule aside on August 20, 2024, and ordered that it not be enforced or take effect on its September 4, 2024 effective date or after. The FTC dismissed its appeals in September 2025 and removed the rule from the Code of Federal Regulations effective February 12, 2026. Michigan employee noncompetes are still judged under MCL 445.774a.
If my employer fires me without cause, can it still enforce my noncompete in Michigan?
It can, if the covenant is written that way. In Coates v Bastian Brothers, the Court of Appeals enforced a one-year covenant against an employee a jury found had been fired without cause, because the clause applied “regardless of the reason for termination of employment.” The covenant still has to be reasonable under MCL 445.774a, and a clause without that language raises a different question.
My agreement only bars me from soliciting my old employer’s clients and names no territory. Will a Michigan court enforce that?
It can. In Rooyakker & Sitz v Plante & Moran, the Court of Appeals held a two-year clause barring former accountants from soliciting or serving the firm’s clients was reasonable under MCL 445.774a, even though it named no geographic area, because the statute lets a court limit a covenant to make it reasonable. The result depends on the clause and the facts.
I never signed a noncompete. Can my former employer still stop me from competing in Michigan?
Generally not from ordinary competition. In Hayes-Albion v Kuberski, the Michigan Supreme Court said a former employee is free to compete using general skill or knowledge, and that there is nothing improper in starting a business and contacting former customers. The limits are that the employee may not use the former employer’s trade secrets, with or without a written agreement, and an employee in a position of trust, like the chief engineer there, owes a fiduciary duty to the employer. A trade secret claim today is brought under the Michigan Uniform Trade Secrets Act, MCL 445.1901 and following, which displaces conflicting tort and other Michigan law on civil remedies for misappropriation (MCL 445.1908).
Related Michigan pages
- Grand Rapids Business Litigation Attorney
- Grand Rapids Trade Secrets Attorney
- Grand Rapids Tortious Interference Attorney
- Grand Rapids Commercial Contract and UCC Dispute Attorney
- Business contracts
I handle noncompete and non-solicitation disputes in Michigan for employers and employees. Contact me 24/7 by phone or email. Your Rights, My Fight! Call for a free initial consultation.
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Law Offices of Mitchell S. Bisson, 2828 Kraft Ave SE, Suite 295, Grand Rapids, MI 49512, serving Kent County and West Michigan.
This page provides general information about Michigan law and is not legal advice. Reading it does not create an attorney-client relationship. Laws change and every case turns on its own facts. Consult a licensed attorney about your specific situation.