# Non-Competes in Michigan[^about] Michigan enforces employee non-competes only when they are reasonable under MCL 445.774a, judges business-to-business covenants under the antitrust rule of reason, and gives courts discretion to limit overbroad covenants rather than voiding them outright. ## Are employee non-compete agreements enforceable in Michigan? {#employee-noncompetes} **Short answer.** 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 [^mcl-774a-employer-may-obtain][^borgiel-unfair-advantage]. 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 [^borgiel-unfair-advantage]. For a clause-by-clause pass over a specific agreement against these rules, the [Michigan non-compete review checklist](/checklists/non-compete/us/michigan) walks the full covenant suite item by item with each requirement's force level. "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."[^borgiel-unfair-advantage] > [!NOTE] > **Practice note.** > > 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 [^mcl-774a-employer-may-obtain][^borgiel-unfair-advantage]. ## What legitimate business interests can support a Michigan non-compete? {#protectable-interests} **Short answer.** Confidential information, customer relationships, and trade secrets are the core interests that justify a Michigan restraint; general skill and knowledge are not protectable [^follmer-confidential-info][^borgiel-general-skill][^mutsa-trade-secret-definition]. 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 [^follmer-confidential-info]. *Borgiel* draws the same line on the employee side: the covenant cannot bar the use of general knowledge or skill [^borgiel-general-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 [^mutsa-trade-secret-definition]. "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."[^follmer-confidential-info] ## How long and how broad can a Michigan non-compete be? {#duration-geography} **Short answer.** 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 [^mcl-774a-reasonable-scope][^coates-question-of-law]. 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 [^mid-michigan-unlimited]. *Coates v. Bastian Brothers, Inc.* confirms a court decides reasonableness as a matter of law when the underlying facts are not in dispute [^coates-question-of-law]. "The reasonableness of a noncompetition provision is a question of law when the relevant facts are undisputed."[^coates-question-of-law] > [!CAUTION] > **Drafting note.** > > 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 [^mcl-774a-reasonable-scope][^mid-michigan-unlimited]. ## Is continued employment enough consideration for a Michigan non-compete? {#continued-employment-consideration} **Short answer.** 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 [^qis-continued-employment][^qis-just-cause]. 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 [^qis-just-cause]. The at-will rule it recited (drawn from federal authority applying Michigan law) governs only when employment really is at will. "Mere continuation of employment is sufficient consideration to support a noncompete agreement in an at-will employment setting."[^qis-continued-employment] > [!CAUTION] > **Drafting note.** > > 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 [^qis-just-cause]. ## Can a Michigan court rewrite or limit an overbroad non-compete? {#court-narrowing} **Short answer.** 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 [^mcl-774a-court-may-limit]. 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 [^mid-michigan-limited]. "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."[^mcl-774a-court-may-limit] > [!CAUTION] > **Drafting note.** > > 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 [^mcl-774a-court-may-limit][^mid-michigan-limited]. ## Are Michigan business-to-business or sale-of-business non-competes judged differently? {#business-to-business} **Short answer.** 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 [^innovation-rule-of-reason]. 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 [^mcl-772-restraint][^mcl-784-federal-deference]. 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. "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."[^innovation-rule-of-reason] > [!NOTE] > **Practice note.** > > 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 [^innovation-rule-of-reason][^mcl-772-restraint]. ## What special non-compete issues affect Michigan physicians? {#physician-rules} **Short answer.** 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 [^borgiel-physician-upheld]. 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 [^steiner-patient-privilege]. "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."[^steiner-patient-privilege] > [!NOTE] > **Practice note.** > > 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 [^steiner-patient-privilege]. ## How does Michigan's trade-secret act interact with non-competes? {#trade-secret-overlay} **Short answer.** 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-displacement]. 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 [^mutsa-limitations], 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 [^mutsa-fees]. "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."[^mutsa-displacement] ## Will Michigan enforce a non-compete's choice-of-law or forum-selection clause? {#choice-of-law-forum} **Short answer.** 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 [^stryker-michigan-clauses]. 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 [^barshaw-michigan-forum-law]. "Under Michigan law, the Michigan forum-selection clause is valid and enforceable."[^stryker-michigan-clauses] ## Does a Michigan non-compete toll or extend during breach or litigation? {#tolling-extension} **Short answer.** 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 [^mcl-774a-tolling-backdrop][^coates-tolling-backdrop]. The relevant backdrop cuts against assuming an automatic extension. MCL 445.774a authorizes a court to *limit* an unreasonable covenant, not to expand one [^mcl-774a-tolling-backdrop], and any extension still has to satisfy the reasonableness test that *Coates* applies as a question of law [^coates-tolling-backdrop]. A clause that converts a fixed restraint into an open-ended one as litigation drags on raises exactly the reasonableness concern the statute targets. > [!NOTE] > **Practice note.** > > 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 [^mcl-774a-tolling-backdrop][^coates-tolling-backdrop]. ## What Michigan non-compete reform should employers watch? {#pending-reform} **Short answer.** 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-worker-ban][^hb-4040-status]. 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 [^hb-4040-worker-ban]. The official bill record shows it was referred to the House Committee on Economic Competitiveness and has had no further action [^hb-4040-status], 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 [^rayford-adhesion-reasonableness]. "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."[^hb-4040-worker-ban] > [!NOTE] > **Practice note.** > > 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 [^hb-4040-worker-ban]. [^about]: By Steven Obiajulu, J.D. Published by [openagreements.org](https://openagreements.org). Last reviewed 2026-06-03. License: CC BY 4.0. Steven Obiajulu, J.D. is admitted in New York, not Michigan. This article synthesizes Michigan primary law and is not legal advice from a Michigan-admitted attorney. This article is for informational purposes only and does not create an attorney-client relationship. [^mcl-774a-employer-may-obtain]: **MCL § 445.774a** — "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." *MCL § 445.774a(1).* [^borgiel-unfair-advantage]: **St. Clair Medical, P.C. v. Borgiel** — "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." *St. Clair Med., P.C. v. Borgiel, 270 Mich. App. 260 (2006).* [^follmer-confidential-info]: **Follmer, Rudzewicz & Co., P.C. v. Kosco** — "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." *Follmer, Rudzewicz & Co., P.C. v. Kosco, 420 Mich. 394 (1984).* [^borgiel-general-skill]: **St. Clair Medical, P.C. v. Borgiel** — "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." *St. Clair Med., P.C. v. Borgiel, 270 Mich. App. 260 (2006).* [^mutsa-trade-secret-definition]: **MCL § 445.1902** — "‘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." *MCL § 445.1902(d).* [^mcl-774a-reasonable-scope]: **MCL § 445.774a** — "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." *MCL § 445.774a(1).* [^coates-question-of-law]: **Coates v. Bastian Brothers, Inc.** — "The reasonableness of a noncompetition provision is a question of law when the relevant facts are undisputed." *Coates v. Bastian Bros., Inc., 276 Mich. App. 498 (2007).* [^mid-michigan-unlimited]: **Mid Michigan Medical Billing Service, Inc. v. Williams** — "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." *Mid Mich. Med. Billing Serv., Inc. v. Williams, No. 323890 (Mich. Ct. App. Feb. 18, 2016).* [^qis-continued-employment]: **QIS, Inc. v. Industrial Quality Control, Inc.** — "Mere continuation of employment is sufficient consideration to support a noncompete agreement in an at-will employment setting." *QIS, Inc. v. Indus. Quality Control, Inc., 262 Mich. App. 592 (2004).* [^qis-just-cause]: **QIS, Inc. v. Industrial Quality Control, Inc.** — "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." *QIS, Inc. v. Indus. Quality Control, Inc., 262 Mich. App. 592 (2004).* [^mcl-774a-court-may-limit]: **MCL § 445.774a** — "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." *MCL § 445.774a(1).* [^mid-michigan-limited]: **Mid Michigan Medical Billing Service, Inc. v. Williams** — "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." *Mid Mich. Med. Billing Serv., Inc. v. Williams, No. 323890 (Mich. Ct. App. Feb. 18, 2016).* [^innovation-rule-of-reason]: **Innovation Ventures, LLC v. Liquid Manufacturing, LLC** — "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." *Innovation Ventures, LLC v. Liquid Mfg., LLC, 499 Mich. 491 (2016).* [^mcl-772-restraint]: **MCL § 445.772** — "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." *MCL § 445.772.* [^mcl-784-federal-deference]: **MCL § 445.784** — "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." *MCL § 445.784(2).* [^borgiel-physician-upheld]: **St. Clair Medical, P.C. v. Borgiel** — "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)." *St. Clair Med., P.C. v. Borgiel, 270 Mich. App. 260 (2006).* [^steiner-patient-privilege]: **Isidore Steiner, DPM, PC v. Bonanni** — "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." *Isidore Steiner, DPM, PC v. Bonanni, 292 Mich. App. 265 (2011).* [^mutsa-displacement]: **MCL § 445.1908** — "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." *MCL § 445.1908(1).* [^mutsa-limitations]: **MCL § 445.1907** — "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." *MCL § 445.1907.* [^mutsa-fees]: **MCL § 445.1905** — "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." *MCL § 445.1905.* [^stryker-michigan-clauses]: **Stryker Corp. v. Ridgeway (Stone Surgical, LLC v. Stryker Corp.)** — "Under Michigan law, the Michigan forum-selection clause is valid and enforceable." *Stryker Corp. v. Ridgeway, 858 F.3d 383 (6th Cir. 2017).* [^barshaw-michigan-forum-law]: **Barshaw v. Allegheny Performance Plastics, LLC** — "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." *Barshaw v. Allegheny Performance Plastics, LLC, 334 Mich. App. 741 (2020).* [^mcl-774a-tolling-backdrop]: **MCL § 445.774a** — "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." *MCL § 445.774a(1).* [^coates-tolling-backdrop]: **Coates v. Bastian Brothers, Inc.** — "The reasonableness of a noncompetition provision is a question of law when the relevant facts are undisputed." *Coates v. Bastian Bros., Inc., 276 Mich. App. 498 (2007).* [^hb-4040-worker-ban]: **Michigan House Bill 4040 (2025)** — "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." *2025 Mich. H.B. 4040 (introduced Jan. 30, 2025).* [^hb-4040-status]: **Michigan House Bill 4040 (2025) — bill status** — "referred to Committee on Economic Competitiveness" *2025 Mich. H.B. 4040, Bill Status (Mich. Legislature).* [^rayford-adhesion-reasonableness]: **Rayford v. American House Roseville I, LLC** — "A shortened limitations provision contained in such an agreement must be examined for reasonableness." *Rayford v. American House Roseville I, LLC, ___ Mich. ___ (2025) (Docket No. 163989).*