Are employee non-compete agreements enforceable in Michigan?
Yes, sometimes. Michigan is a reasonableness state, not a general-ban state: MCL 445.774a lets an employer enforce a covenant that protects a reasonable competitive business interest and is reasonable in duration, geographic area, and the type of employment restricted.
The governing statute is part of the Michigan Antitrust Reform Act. A covenant is valid only if it does more than block ordinary competition — under St. Clair Medical, P.C. v. Borgiel it must protect against the employee gaining an unfair competitive advantage and may not stop the employee from using general knowledge or skill .
Do not treat Michigan as a total-ban state, and do not assume a covenant is enforceable just because the statute permits non-competes. Start with the reasonable-competitive-business-interest test and the duration, geography, and type-of-employment limits, because a covenant that merely suppresses competition fails even though the statute allows non-competes.
Sources for this answer
Primary law · 1987-12-28
A.1 MCL § 445.774aMCL 445.774a supports the rule that a Michigan employee non-compete is permitted when it protects a reasonable competitive business interest and is reasonable in duration, geographic area, and type of employment.
An employer may obtain from an employee an agreement or covenant which protects an employer's reasonable competitive business interests and expressly prohibits an employee from engaging in employment or a line of business after termination of employment if the agreement or covenant is reasonable as to its duration, geographical area, and the type of employment or line of business.
See MCL § 445.774a(1).
Case law · 2006-05-24
A.2 St. Clair Medical, P.C. v. BorgielBorgiel supports the rule that a reasonable Michigan covenant must protect against an unfair competitive advantage and may not bar use of general knowledge or skill.
To be reasonable in relation to an employer's competitive business interest, a restrictive covenant must protect against the employee's gaining some unfair advantage in competition with the employer, but not prohibit the employee from using general knowledge or skill.
See St. Clair Med., P.C. v. Borgiel, 270 Mich. App. 260 (2006).
What legitimate business interests can support a Michigan non-compete?
Confidential information, customer relationships, and trade secrets are the core interests that justify a Michigan restraint; general skill and knowledge are not protectable.
In Follmer, Rudzewicz & Co., P.C. v. Kosco, the Michigan Supreme Court held that a covenant is enforceable to the extent it reasonably protects the employer's confidential information, and unenforceable to the extent it reaches further . Borgiel draws the same line on the employee side: the covenant cannot bar the use of general knowledge or skill .
The Michigan Uniform Trade Secrets Act supplies the trade-secret overlay. A trade secret is information that derives independent economic value from not being generally known and is the subject of reasonable secrecy efforts .
Sources for this answer
Case law · 1985-01-17
B.1 Follmer, Rudzewicz & Co., P.C. v. KoscoFollmer supports protecting an employer's confidential information through a covenant, but only to the extent reasonably necessary.
To the extent such an agreement provides reasonable protection for the confidential information of the employer, it does not violate the statute and is enforceable.
See Follmer, Rudzewicz & Co., P.C. v. Kosco, 420 Mich. 394 (1984).
Case law · 2006-05-24
B.2 St. Clair Medical, P.C. v. BorgielBorgiel supports the limit that a non-compete cannot prohibit an employee from using general knowledge or skill.
To be reasonable in relation to an employer's competitive business interest, a restrictive covenant must protect against the employee's gaining some unfair advantage in competition with the employer, but not prohibit the employee from using general knowledge or skill.
See St. Clair Med., P.C. v. Borgiel, 270 Mich. App. 260 (2006).
Primary law · 1998-12-30
B.3 MCL § 445.1902MCL 445.1902 supports Michigan's statutory trade-secret definition, which requires independent economic value from secrecy and reasonable secrecy efforts.
“Trade secret” means information, including a formula, pattern, compilation, program, device, method, technique, or process, that is both of the following: (i) Derives independent economic value, actual or potential, from not being generally known to, and not being readily ascertainable by proper means by, other persons who can obtain economic value from its disclosure or use.
See MCL § 445.1902(d).
How long and how broad can a Michigan non-compete be?
There is no fixed numeric cap. MCL 445.774a requires the duration, geographic area, and type of employment to be reasonable, and whether a covenant clears that bar is a question of law when the facts are undisputed.
Reasonableness is fact-specific, but the outer bounds are clear: in Mid Michigan Medical Billing Service, Inc. v. Williams, the Court of Appeals held that a restriction with unlimited duration and geographic reach on working for any past or current client was unreasonable . Coates v. Bastian Brothers, Inc. confirms a court decides reasonableness as a matter of law when the underlying facts are not in dispute .
Tie duration, geography, and covered activity to the specific interest the covenant protects rather than copying a long default term. Mid Michigan Billing shows that an unlimited or open-ended client restriction is vulnerable as unreasonable, so a narrower, interest-matched scope is more defensible.
Sources for this answer
Primary law · 1987-12-28
C.1 MCL § 445.774aMCL 445.774a supports the requirement that a covenant be reasonable as to duration, geographic area, and type of employment or line of business.
An employer may obtain from an employee an agreement or covenant which protects an employer's reasonable competitive business interests and expressly prohibits an employee from engaging in employment or a line of business after termination of employment if the agreement or covenant is reasonable as to its duration, geographical area, and the type of employment or line of business.
See MCL § 445.774a(1).
Case law · 2007-10-26
C.2 Coates v. Bastian Brothers, Inc.Coates supports that reasonableness of a Michigan non-compete is a question of law when the relevant facts are undisputed.
The reasonableness of a noncompetition provision is a question of law when the relevant facts are undisputed.
See Coates v. Bastian Bros., Inc., 276 Mich. App. 498 (2007).
Case law · 2016-02-18
C.3 Mid Michigan Medical Billing Service, Inc. v. WilliamsPDFMid Michigan Billing supports treating an unlimited-duration, unlimited-geography client restriction as unreasonable.
Although plaintiff argues that the expansive restriction is necessary to protect its business interests, plaintiff does not have an unlimited right to restrict the business choices of its clients.
See Mid Mich. Med. Billing Serv., Inc. v. Williams, No. 323890 (Mich. Ct. App. Feb. 18, 2016).
Is continued employment enough consideration for a Michigan non-compete?
For a genuine at-will employee, usually yes — but it is not automatic. QIS, Inc. v. Industrial Quality Control, Inc. states the rule that mere continuation of at-will employment is sufficient consideration, yet QIS itself held the covenant void for lack of consideration because the workers were just-cause employees.
The outcome in QIS is the cautionary part. The court agreed the agreement was void because the employees could not be dismissed without just cause, so their continued employment did not supply consideration for signing a new restraint . The at-will rule it recited (drawn from federal authority applying Michigan law) governs only when employment really is at will.
For a non-at-will or just-cause employee, do not rely on continued employment alone as consideration. QIS held a covenant void in that setting because refusing to sign would not have been just cause for termination, so provide separate, identifiable consideration when the worker is not at will .
Sources for this answer
Case law · 2004-09-15
D.1 QIS, Inc. v. Industrial Quality Control, Inc.QIS states the rule that mere continuation of at-will employment is sufficient consideration for a Michigan non-compete (while holding the covenant void on its facts because the workers were just-cause employees).
Mere continuation of employment is sufficient consideration to support a noncompete agreement in an at-will employment setting.
See QIS, Inc. v. Indus. Quality Control, Inc., 262 Mich. App. 592 (2004).
Case law · 2004-09-15
D.2 QIS, Inc. v. Industrial Quality Control, Inc.QIS held the covenant void for lack of consideration because the workers were just-cause employees, so continued employment did not supply consideration; refusal to sign would not amount to just cause for termination.
Because defendants were “just cause” employees, however, the issue is whether defendants' refusal to sign the noncompete agreement would amount to “just cause” for their termination.
See QIS, Inc. v. Indus. Quality Control, Inc., 262 Mich. App. 592 (2004).
Can a Michigan court rewrite or limit an overbroad non-compete?
Yes. MCL 445.774a expressly lets a court limit a covenant it finds unreasonable and enforce it as limited, so Michigan is a statutory blue-pencil state .
This power is real but discretionary, not guaranteed. In Mid Michigan Medical Billing Service, Inc. v. Williams, the court confirmed that MCL 445.774a lets a court modify an unreasonable covenant to render it reasonable and enforceable rather than void it outright .
Because the statute says a court may limit an overbroad covenant, not that it must, do not rely on judicial narrowing as a safety net. Draft scope, geography, and duration to the minimum the protectable interest requires, since a court may decline to save a covenant it views as punitive.
Sources for this answer
Primary law · 1987-12-28
E.1 MCL § 445.774aMCL 445.774a supports the rule that a Michigan court may limit an unreasonable covenant and enforce it as limited (statutory blue-pencil).
To the extent any such agreement or covenant is found to be 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 the agreement as limited.
See MCL § 445.774a(1).
Case law · 2016-02-18
E.2 Mid Michigan Medical Billing Service, Inc. v. WilliamsPDFMid Michigan Billing supports that MCL 445.774a lets a court modify an unreasonable covenant to render it reasonable and enforceable rather than void it.
If the terms of a noncompetition agreement are unreasonable, MCL 445.774a allows a court to modify the terms of the agreement to render it reasonable and enforceable in light of the circumstances in which it was made.
See Mid Mich. Med. Billing Serv., Inc. v. Williams, No. 323890 (Mich. Ct. App. Feb. 18, 2016).
Are Michigan business-to-business or sale-of-business non-competes judged differently?
Yes. The Michigan Supreme Court held in Innovation Ventures, LLC v. Liquid Manufacturing, LLC that commercial non-competes between businesses are evaluated under the antitrust rule of reason, not the MCL 445.774a employee test .
The rule of reason flows from the Michigan Antitrust Reform Act, which makes contracts in restraint of trade in a relevant market unlawful and directs courts to give due deference to federal antitrust interpretations. That standard is different from the employee test: a true commercial or transaction-ancillary restraint is analyzed for its market context and competitive effect rather than under MCL 445.774a's duration, geography, and type-of-employment framework.
Identify which framework applies before assessing a covenant. Innovation Ventures routes true commercial covenants, including transaction-ancillary covenants, to the antitrust rule of reason, so applying the MCL 445.774a employee duration-geography test to a genuine business-to-business covenant analyzes it under the wrong standard.
Sources for this answer
Case law · 2016-07-14
F.1 Innovation Ventures, LLC v. Liquid Manufacturing, LLCInnovation Ventures supports judging commercial business-to-business non-competes under the antitrust rule of reason rather than the MCL 445.774a employee test.
Commercial noncompete agreements between businesses should be evaluated under the rule of reason, and federal court interpretations of the rule of reason should be given due deference.
See Innovation Ventures, LLC v. Liquid Mfg., LLC, 499 Mich. 491 (2016).
Primary law · 1985-03-29
F.2 MCL § 445.772MCL 445.772 supports the antitrust baseline that a contract in restraint of trade in a relevant market is unlawful, which anchors the rule-of-reason analysis for commercial covenants.
A contract, combination, or conspiracy between 2 or more persons in restraint of, or to monopolize, trade or commerce in a relevant market is unlawful.
See MCL § 445.772.
Primary law · 1985-03-29
F.3 MCL § 445.784MCL 445.784 supports giving due deference to federal antitrust interpretations, which the rule-of-reason analysis for commercial covenants relies on.
It is the intent of the legislature that in construing all sections of this act, the courts shall give due deference to interpretations given by the federal courts to comparable antitrust statutes, including, without limitation, the doctrine of per se violations and the rule of reason.
See MCL § 445.784(2).
What special non-compete issues affect Michigan physicians?
Michigan does not categorically ban physician non-competes — they are analyzed under the ordinary MCL 445.774a reasonableness test, and Borgiel itself upheld a physician covenant . The distinctive problem is evidentiary, not categorical.
In Isidore Steiner, DPM, PC v. Bonanni, the Court of Appeals held that Michigan's physician-patient privilege is more protective than HIPAA and blocks discovery of nonparty patient information, which can make it harder for a medical employer to prove diversion of patients .
A physician non-solicitation or non-compete can be valid yet hard to enforce in practice. Steiner shows that patient-privilege limits on discovery can deprive a medical employer of the nonparty-patient evidence it needs to prove a breach, so build the enforcement case on non-privileged proof .
Sources for this answer
Case law · 2006-05-24
G.1 St. Clair Medical, P.C. v. BorgielBorgiel supports that a physician non-compete can satisfy the MCL 445.774a reasonable-competitive-business-interest test.
We conclude that the covenant protected plaintiff from unfair competition by defendant and therefore protected a reasonable competitive business interest as required by MCL 445.774a(1).
See St. Clair Med., P.C. v. Borgiel, 270 Mich. App. 260 (2006).
Case law · 2011-04-07
G.2 Isidore Steiner, DPM, PC v. BonanniSteiner supports that Michigan's physician-patient privilege blocks discovery of nonparty patient information, creating a proof hurdle in physician non-compete enforcement.
Because Michigan law is more protective of patients' privacy interests in the context of this litigation, Michigan law applies to plaintiff's attempted discovery of defendant's patient information.
See Isidore Steiner, DPM, PC v. Bonanni, 292 Mich. App. 265 (2011).
How does Michigan's trade-secret act interact with non-competes?
The Michigan Uniform Trade Secrets Act runs alongside a non-compete: it displaces conflicting common-law tort remedies for misappropriation but preserves contract remedies, so a confidentiality and trade-secret strategy can backstop or substitute for a covenant .
MUTSA has its own timing and fee rules that a non-compete does not. A misappropriation claim must be brought within three years of discovery , and a court may award attorney fees for bad-faith claims or willful and malicious misappropriation — relief the non-compete statute itself does not provide .
Sources for this answer
Primary law · 1998-12-30
H.1 MCL § 445.1908MCL 445.1908 supports that MUTSA displaces conflicting common-law tort remedies for trade-secret misappropriation while preserving contract remedies.
Except as provided in subsection (2), this act displaces conflicting tort, restitutionary, and other law of this state providing civil remedies for misappropriation of a trade secret.
See MCL § 445.1908(1).
Primary law · 1998-12-30
H.2 MCL § 445.1907MCL 445.1907 supports MUTSA's three-year limitations period for a misappropriation claim, distinct from a contract breach claim.
An action for misappropriation must be brought within 3 years after the misappropriation is discovered or by the exercise of reasonable diligence should have been discovered.
See MCL § 445.1907.
Primary law · 1998-12-30
H.3 MCL § 445.1905MCL 445.1905 supports fee-shifting for bad-faith misappropriation claims or willful and malicious misappropriation, relief the non-compete statute does not provide.
If a claim of misappropriation is made in bad faith, a motion to terminate an injunction is made or resisted in bad faith, or willful and malicious misappropriation exists, the court may award reasonable attorney's fees to the prevailing party.
See MCL § 445.1905.
Will Michigan enforce a non-compete's choice-of-law or forum-selection clause?
Often yes. In the Stryker Corp. v. Ridgeway litigation (the Stone Surgical dispute), the Sixth Circuit held that a non-compete's Michigan forum-selection clause was valid and enforceable under Michigan law .
But the clause type matters. In Barshaw v. Allegheny Performance Plastics, LLC, the Court of Appeals held that a Michigan court applies Michigan law to decide the effect of a forum-selection clause, even when the contract chooses another state's law for the merits .
“Under Michigan law, the Michigan forum-selection clause is valid and enforceable.”
Sources for this answer
Case law · 2017-05-24
I.1 Stryker Corp. v. Ridgeway (Stone Surgical, LLC v. Stryker Corp.)Stryker/Stone Surgical supports that a non-compete's Michigan forum-selection clause is valid and enforceable under Michigan law.
Under Michigan law, the Michigan forum-selection clause is valid and enforceable.
See Stryker Corp. v. Ridgeway, 858 F.3d 383 (6th Cir. 2017).
Case law · 2020-11-24
I.2 Barshaw v. Allegheny Performance Plastics, LLCBarshaw supports that a Michigan court applies Michigan law to determine the effect of a forum-selection clause, separate from any choice-of-law provision.
Hence, in the absence of certain factors not germane to this appeal, a forum-selection clause may be considered separately from any choice-of-law provision that may also be in the contract, and in such cases, the Michigan court in which the action has been filed, shall apply Michigan law in determining the effect of the forum-selection clause.
See Barshaw v. Allegheny Performance Plastics, LLC, 334 Mich. App. 741 (2020).
Does a Michigan non-compete toll or extend during breach or litigation?
This is an open Michigan question. No Michigan statute or appellate decision surfaced here squarely endorses automatic judicial tolling, or enforcement of an extension-on-breach clause after the stated restricted period expires.
The relevant backdrop cuts against assuming an automatic extension. MCL 445.774a authorizes a court to limit an unreasonable covenant, not to expand one , and any extension still has to satisfy the reasonableness test that Coates applies as a question of law . A clause that converts a fixed restraint into an open-ended one as litigation drags on raises exactly the reasonableness concern the statute targets.
Open question: Michigan law is unsettled on whether an extension-on-breach clause is enforceable after the original restricted period expires. Draft any tolling clause as a separate, reasonable restraint tied to the duration of the breach and a legitimate interest, and do not assume a Michigan court will extend an expired covenant automatically.
Sources for this answer
Primary law · 1987-12-28
J.1 MCL § 445.774aMCL 445.774a provides backdrop support for the tolling caution: its remedial text authorizes a court to limit an unreasonable covenant, not to extend one, so it does not endorse automatic extension.
To the extent any such agreement or covenant is found to be 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 the agreement as limited.
See MCL § 445.774a(1).
Case law · 2007-10-26
J.2 Coates v. Bastian Brothers, Inc.Coates provides backdrop support for the tolling caution: any clause that would extend the restricted period must still satisfy Michigan's reasonableness framework, which Coates treats as a question of law when facts are undisputed.
The reasonableness of a noncompetition provision is a question of law when the relevant facts are undisputed.
See Coates v. Bastian Bros., Inc., 276 Mich. App. 498 (2007).
What Michigan non-compete reform should employers watch?
None is currently law. The bill to watch is House Bill 4040 (2025), which would amend MCL 445.774a to bar nearly all worker non-competes; as of June 3, 2026 it remains in committee and has not been enacted.
HB 4040 would prohibit a business from entering into, obtaining, or enforcing a non-compete against a worker, reaching beyond employees to independent contractors, interns, and volunteers . The official bill record shows it was referred to the House Committee on Economic Competitiveness and has had no further action , so the enacted baseline remains statutory reasonableness under MCL 445.774a, as interpreted by Michigan non-compete cases.
A separate 2025 development affects onboarding paperwork that bundles covenants. In Rayford v. American House Roseville I, LLC, the Michigan Supreme Court held that a contractually shortened limitations provision in an adhesion agreement must be examined for reasonableness .
Treat HB 4040 as a monitoring item, not as present Michigan law. Recheck the official Michigan Legislature bill status before changing forms or telling workers that Michigan has enacted a general non-compete ban .
Sources for this answer
Primary law · 2025-01-30
K.1 Michigan House Bill 4040 (2025)HB 4040, the 2025 reform bill still in committee, would prohibit a business from entering into, obtaining, or enforcing a non-compete against a worker.
Except as otherwise provided in subsection (2), a business shall not do any of the following: (a) Enter into or attempt to enter into a noncompete agreement with a worker. (b) Obtain or attempt to obtain a noncompete agreement from a worker. (c) Enforce or attempt to enforce a noncompete agreement against a worker or former worker.
See 2025 Mich. H.B. 4040 (introduced Jan. 30, 2025).
Primary law · 2025-02-04
K.2 Michigan House Bill 4040 (2025) — bill statusThe official Michigan Legislature bill record supports that HB 4040 was referred to the House Committee on Economic Competitiveness and has had no further (enactment) action.
referred to Committee on Economic Competitiveness
See 2025 Mich. H.B. 4040, Bill Status (Mich. Legislature).
Case law · 2025-07-31
K.3 Rayford v. American House Roseville I, LLCRayford supports that a contractually shortened limitations provision in an adhesion agreement must be examined for reasonableness, which matters for onboarding packets bundling covenants.
A shortened limitations provision contained in such an agreement must be examined for reasonableness.
See Rayford v. American House Roseville I, LLC, ___ Mich. ___ (2025) (Docket No. 163989).