Independent Contractor Work Agreement With Non Compete Clause In Michigan
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FAQ
Employers do enforce non-competes, but the extent varies. Some employers rigorously enforce these agreements to protect their business interests, while others may choose not to pursue legal action.
Showing that the agreement is not related to a legitimate business interest is the most effective way of getting out of a non-compete contract. The goal of any non-compete agreement is to protect trade secrets.
In Michigan, non-compete agreements are generally enforceable if they are reasonable in scope, duration, and geographical limitation. They must also protect a legitimate business interest, such as trade secrets or customer relationships.
Even workers labeled as “independent contractors”—who should have the freedom to work for multiple clients—are often required to sign non-competes that limit where they can work. Employers often present non-competes as a “take it or leave it” contract, forcing workers either to sign or forego employment.
1 Michigan courts continually uphold and enforce non-competes. 2 However, recent non-competes in Michigan have been subject to debate because of the many disadvantages such clauses pose to employees.
The ban covers all non-competes for U.S. workers (including employees and independent contractors) with limited carve-outs, and is subject to certain exceptions based on the FTC's statutory authority.
Several factors can void or limit the enforceability of a non-compete agreement, including overly broad restrictions, unreasonable time frames or geographical limits, lack of consideration (such as compensation or job opportunities provided in exchange for the agreement), and violation of public policy.
Typically, a noncompete agreement prohibits you from working for a competitor until a set period has passed, but it may additionally ban you from completing the following actions: Starting your own company in the same industry. Contacting former customers. Utilizing skills you learned on the job.
Although disfavored in Michigan, they are not completely void. A noncompete agreement must be reasonably narrow, in that it protects an employer's reasonable competitive business interests. It must be reasonable in its duration, geographical area and the type of employment or line of business.
The following are the most common ways to get out of a non-compete agreement: Determine that the terms of the contract do not in fact prevent you from a desired course of action. Recognize when a non-compete contradicts the law. Negotiate a release agreement with the involved parties. Ignore the agreement.
