Allowed if reasonable
Non-compete law in Michigan
Michigan has one short statute: an employer may obtain from an employee a covenant that protects its reasonable competitive business interests and prohibits the employee from working in a line of business after employment ends, if it is reasonable in duration, geographic area and type of employment or line of business. A court that finds a covenant unreasonable in any respect may limit it to a reasonable scope and enforce it as limited. Section 445.774a sets no pay threshold, duration cap or occupational exclusion; other Michigan statutes were not searched for occupation-specific rules.
Last verified · confidence medium. Clauseworthy is not a law firm and does not give legal advice.
- Employee non-competes
- Not banned; conditions apply
- Pay floor
- None in the statute
- Duration
- No statutory cap; must be reasonable in duration, geographic area and type of employment or line of business (MCL 445.774a(1)).
Exceptions and special rules
- Section 445.774a does not mention sale-of-business covenants; it governs covenants between an employer and an employee. No other statutory exclusions.
Non-solicitation clauses
Section 445.774a speaks of agreements that 'prohibit an employee from engaging in employment or a line of business'; it does not separately address non-solicitation covenants.
Remedies
Court may limit an unreasonable covenant to render it reasonable and specifically enforce it as limited (MCL 445.774a(1)). No fee-shifting or penalty provision.
Which agreements it covers
Applies to covenants and agreements entered into after March 29, 1985 (MCL 445.774a(2)). 1985-03-29 (entered into after) Applies to agreements entered into after (not on) 1985-03-29.
Primary sources
- Michigan Antitrust Reform Act, MCL 445.774a Read from an Internet Archive copy of the official page, snapshot 2026-04-17: the official site did not answer when this row was verified.
- 2025 HB 4514 (physician noncompete bill) bill page: introduced 2025-05-21, referred to Committee on Health Policy Read from an Internet Archive copy of the official page, snapshot 2026-01-22: the official site did not answer when this row was verified.