Potentially relevant laws in the jurisdiction include:

# Statute:

## 445.774a. Agreements not to compete; application

Sec. 4a. 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. 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.

# Caselaw:

Non-competition agreements “are disfavored as restraints of commerce and are only enforceable to the extent they are reasonable.” *Teachout Security Services, Inc. v. Thomas*, (State App. Ct. 2010).

“State statute permitting an employer to obtain a reasonable non-compete agreement from an employee superseded earlier statutes barring employers from demanding ‘consideration’ as a condition of employment, to the extent the statutes conflicted.” *Sherrod v. Genzyme Corp.*, (State Ct. App. 2006).

“Because the prohibition on all competition is in restraint of trade, an employer’s business interest justifying a restrictive covenant must be greater than merely preventing competition.” *Innovation Ventures, L.L.C. v. Liquid Mfg., L.L.C.,* (State App. Ct. 2014).

“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.” *Capaldi v. LiftAid Transp., L.L.C.,* (State App. Ct. 2006).

“A non-compete agreement is enforceable if it: (a) protects the employer's reasonable competitive business interests, and (b) is reasonable in duration, geographical scope, and type of employment or line of business.” *St. Clair Medical*, (State App. Ct. 2008).

The employer's reasonable competitive business interests include “preventing the anticompetitive use of confidential information.” and protecting “close contact with the employer's customers or customer lists, or cost factors and pricing.” *PLLC v. Plante & Moran*, (State App. Ct. 2007).

“In evaluating a non-competition clause for reasonableness, this state’s courts generally examine the clause's duration, geographic scope, and the type of employment prohibited.” *Certified Restoration Dry Cleaning Network, L.L.C. v. Tenke Corp.*, (State App. Ct. 2007)

“With respect to duration, this state’s courts have not provided any bright line rules. Rather, they have upheld non-compete agreements covering time periods of six months to three years.” *St. Clair Medical*, (State App. Ct. 2008).

“Limited duration agreements that prohibit competition by persons with access to confidential information have been upheld. *See* *Coates,* (upholding a non-compete provision prohibiting former general manager's employment with any of employer's competitors located within one hundred miles of any of employer's locations for a period of one year); *Rooyakker,* (upholding a non-compete provision prohibiting accountant from rendering any of the services provided by his former firm to any of that firm's clients for a period of two years); *St. Clair Med.,* (upholding a non-compete clause prohibiting a physician from practicing medicine within seven miles of his former medical office for a period of one year)…

However, courts have not enforced covenants that have prevented the former employee from engaging in competition with the employer when the employee had no confidential information that would have given him an unfair competitive advantage. *See* *Northern Mich. Title Co.,* (finding unreasonable a non-compete clause which completely prohibited former employees of title insurance company from engaging in the title insurance business for five years based on conclusion that nothing about employees' former employment would give them unfair advantage in competing for clients who had never given business to the employer in the first place); *A Complete Home Care Agency, Inc. v. Gutierrez,* (upholding a lower court's determination that a covenant prohibiting a former nursing services employee from performing any kind of services, including non-nursing services, for clients of former employer was unreasonably broad); *Whirlpool,* (finding that employer had not demonstrated a likelihood of success in enforcing a non-compete clause prohibiting employment with firm's competitors when employer had not demonstrated that employee was likely to disclose or use to his advantage confidential information acquired while working for employer).” *Certified Restoration Dry Cleaning Network, L.L.C. v. Tenke Corp.*, (State App. Ct. 2007).

“Under state law, employment agreement containing covenant not to compete is enforceable even if some of its terms are found to be unreasonable, and court may enforce agreement to extent it is reasonable by substituting reasonable terms for those omitted or found to be unreasonable.” *Kelly Services, Inc. v. Marzullo*, (State App. Ct. 2008).