Legal Question in Business Law in Michigan

non compete clause

I have an employment contract drawn by the principal of the company I work for, he is not an attorney. The contract has no expiration date. The contract contains a non-compete clause. I have heard that non-compete clauses are not legal in Michigan and that as the contract was not drawn by an attorney, the matter could/should be settled out of court. Are either of the previous statements accurate? Thank you for your time.


Asked on 8/28/01, 11:25 am

1 Answer from Attorneys

Regina Mullen Legal Data Services, PLC

Re: non compete clause

Anyone can write a binding contract, if the necessary terms are there. Michigan courts have recognized non-competition clauses recently as last May, so yes, they are legal. As for the late of end-date, check whether the contract has a "severability" clause,--in other words, that any offending clauses will simply be taken out, so the intent of the contract is not defeated. Courts routinely interpret contracts to bind the parties to the deal they made.

You can ALWAYS settle a matter out of court. Courts are usually very happy for you to do so, and in many cases force you into mediation. It's cheaper to negotiate without court supervision... Courts have a way of interpreting contracts based upon extra-contractual principles, such as fairness, course of dealing, that can make a contract enforceable or NOT enforceable, depending upon what the judge thinks is fair. yet, sometimes these clauses are so broad as to be practically unenforceable, so that's where you should consult a lawyer to review the specific terms under current law, so you can decide what to do. It seems as though the company must be small, if the principal is writing his own contracts, so try to negotiate it. If you're not actually going to compete with his business/company, you have no need to get out of the non-competition clause.

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Answered on 9/17/01, 11:05 am


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