Are Non-Competes Enforceable in Michigan? (2026)

What a Michigan Non-Compete Agreement Actually Restricts

A non-compete limits where you can work after leaving a job. Michigan's antitrust law starts from a rule against deals that choke competition, since MCL 445.772 makes a contract, combination or conspiracy in restraint of trade unlawful.

Employee non-competes sit in a carve-out from that rule. Under MCL 445.774a, an employer may obtain an agreement that protects its reasonable competitive business interests and bars an employee from a line of business after employment ends – if it is reasonable as to duration, area and type of employment.

That carve-out has a boundary. MCL 445.774 states plainly that the labor of a human being is not a commodity or an article of commerce. A contract, not the market, is what limits your skills.

How Michigan Courts Decide If a Non-Compete Is Reasonable

Reasonableness is the whole ballgame. Generally speaking, a judge looks at how long the restriction lasts, how much territory it covers and how broadly it defines competing work. A clause covering one metro area for a year reads very differently than one covering the Midwest for five.

The employer also has to point to something worth protecting, and confidential information is the classic example. MCL 445.1902 defines a trade secret as information that draws independent economic value from not being generally known and is the subject of reasonable efforts to keep it secret.

That same section treats theft, bribery or breach of a duty of secrecy as improper means of taking one. Protecting that is a far stronger justification than not wanting a former employee to succeed elsewhere.

What Happens When a Court Finds a Non-Compete Too Broad

This surprises many Michigan workers. An overbroad non-compete is not automatically dead. MCL 445.774a lets a court limit an agreement found unreasonable in any respect, then enforce the trimmed-down version. A five-year restriction might become a one-year restriction rather than nothing.

Separate remedies can stack on top. Under MCL 445.1903, actual or threatened misappropriation of a trade secret may be enjoined, though that injunction ends once the secret ceases to exist. MCL 445.1904 allows recovery of the actual loss plus any unjust enrichment, or a reasonable royalty.

On the antitrust side, MCL 445.778 lets a person injured in business or property seek injunctive relief, actual damages, interest, costs and attorney fees – and up to three times actual damages if the violation is flagrant.

What to Check Before Signing or Leaving a Job

Read the clause before it matters, not after. A few things typically deserve a close look.

• The length of the restriction and the exact date it starts running.
• The geographic area, and whether it matches where the employer actually competes.
• How the agreement defines competing work, since a broad definition sweeps in more roles.
• Any separate confidentiality or non-disclosure language sitting alongside it.

Do not assume a trade secret dispute and a contract dispute are the same fight. MCL 445.1908 displaces conflicting state civil remedies for trade secret misappropriation, but expressly leaves contractual remedies untouched. In franchise paperwork, MCL 445.1527 voids some provisions outright, including a ban on joining a franchisee association and any clause forcing arbitration outside Michigan.

Pending Legislation That Could Change Michigan Non-Competes

Michigan's rules have been stable for decades, and the statute is dated – it applies to covenants entered into after March 29, 1985. Proposals to narrow employee non-competes surface periodically, so anyone drafting a long-term agreement may want flexibility built in. MCL 445.784 also directs Michigan courts to give due deference to how federal courts read comparable antitrust statutes, including the rule of reason, so federal shifts can reach Michigan courtrooms without state law changing.

Public enforcement is also on the table. MCL 445.777 lets the attorney general sue in the name of the state for injunctive relief and civil penalties of up to $50,000 per violation. Until the law changes, the reasonableness test decides these cases.

Simplify Your Michigan Business Paperwork With ConsumerShield

A narrowly written agreement causes far fewer problems than one a court has to rewrite. A template can save time and reduce the risk that you draft an invalid or unenforceable contract. For help with drafting yours, explore ConsumerShield's online tools and resources today.