Category Archives: Employment Agreements

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Michigan Court Cuts Down Non-Compete Agreement

Abraham Lincoln once noted that if he had six hours to chop down a tree, he would spend the first four¬†sharpening the axe. For employers, that sort of up-front attention to details is especially important when it comes to non-compete agreements. Otherwise, as a recent Michigan Court of Appeals illustrates, the only thing likely to … Continue Reading

Proposed Changes Affecting Employment at Michigan Home Help Care Agencies

When it comes to establishing basic terms and conditions of employment, such as hiring someone as an independent contractor or as a W-2 employee, business owners generally enjoy significant leeway. But this could change for certain Michigan businesses providing home help care services under proposed changes by the Michigan Department of Community Health (MDCH). This … Continue Reading

Common Mistakes that Derail Enforcement of a Noncompete Agreement

Our law firm was recently hired to represent clients – former employees – being sued for allegedly violating a noncompete agreement, trade secret misappropriation, and other business related claims. As is typical with these sorts of cases, the Plaintiff, the former employer, was seeking injunctive relief in the form of a temporary restraining order (TRO) … Continue Reading

Is Your Non-compete Agreement Enforceable? Not Without a “Reasonable Competitive Interest”

“Sticking feathers up your butt, does not make you a chicken.“ Tyler Durden, Fight Club Under Michigan law, one required element for having an enforceable non-compete agreement is a “reasonable competitive business interest.” But, like the chicken quote, business owners can’t expect to just stick the phrase “reasonable competitive business interest” into an employee agreement … Continue Reading

Enforceable Noncompete Agreement Key to $2 Million Judgment Against Former Employee

A recent Michigan trial court decision from the Oakland County Circuit Court illustrates the significance that noncompete agreements can have for employers and individuals who sign such agreements.  Specifically, Crain’s Detroit Business reported that an Oakland County Circuit court entered a judgment in excess of $2 million against Matt Prentice, a former employee and a well-known Metro … Continue Reading

The Challenge of Balancing Noncompete Agreements with Business Growth

In a previous post (Noncompete Agreements – A Hurdle to Employment and Innovation?), we discussed research that suggested noncompete agreements hinder innovation. Expanding on why innovation is hindered, in any context in which a noncompete agreement is entered into e.g., an employment relationship, a founder whose start-up is being acquired, or an owner selling his or her … Continue Reading

Employment Agreement Shortening Time for Bringing FLSA and Equal Pay Act Claims Invalidated by Court

On August 6, 2013, the Sixth Circuit Court of Appeals (the federal jurisdiction that includes Michigan) ruled that provisions in employment agreements that shorten the statute of limitations period in which employees are permitted to file claims under the Fair Labor Standards Act (FLSA) and Equal Pay Act (EPA) are invalid. Specifically, in Boaz v … Continue Reading

Enforcing Noncompete Agreements: How to Avoid Wasting A+ Resources on the C- Employee

Noncompete agreements have become a staple of the employment relationship. These agreements are intended to give employers the ability to protect their business against unreasonable and unfair competition. Such competition usually takes the form of a former employee directly competing against the employer either by starting a similar business or jumping ship for competitor.   … Continue Reading

Enforceability of a Noncompete Agreement will Often Depend Upon Context.

It may sound odd for a noncompete attorney to say this, but when it comes to enforcing a non-compete restriction, the applicable law is often less important than the context in which the noncompete restriction arises. To better understand this point, consider that noncompete restrictions, sometimes referred to as covenants not to compete, often arise … Continue Reading

Doubting Attorney Google – Relying on Free Legal Search Results Can be Dangerous Thing

A little bit of knowledge can be a dangerous thing, especially when legal issues are involved. This truism makes the Internet a virtual minefield for the unwary looking for “free legal advice,” which often happens in the area of post employment restrictions and noncompete agreements. As discussed below, however, a noncompete lawsuit arising from incomplete … Continue Reading

Michigan Noncompete Agreements – Making 2013 a Better Year for Your Business

Business owners had a lot to cry about when it came to 2012 Michigan court decisions addressing noncompete agreements. But, as discussed below, a lot of this frustration arose out of poorly drafted noncompete agreements and failing to fully evaluate the relevant circumstances involving changing employment relationships before reducing those changes to written employment agreements.  … Continue Reading

Transitioning from Employee to Shareholder: Businesses and Individuals Need to Pay Careful Attention to Noncompete Agreements

Companies routinely require employees to sign noncompete agreements. But what happens to these employee noncompete agreements if your company offers that same employee stock options or other opportunities to acquire an ownership interest in the company?  As explained below, when an individual transitions from employee to owner or plays the dual role of employee/owner, companies … Continue Reading

DIY Employment and Noncompete Agreements: Are You Getting What you Pay For?

The storm that has devastated the U.S. east coast has been dubbed “Frankenstorm” because of the devastating effect of a number of separate natural conditions coming together to create a monstrous “super storm.”   While with less devastation and real-life danger, employers often experience their own employment storms as a result of stitching together various … Continue Reading

Preventing an Employee From Working for a Competitor Unravels without an Enforceable Noncompete Agreement

A fantastic, but often overlooked movie is True Romance. The movie stars Christian Slater whose character, Clarence Worley, delivers the following line: If there’s one thing this last week has taught me, it’s better to have a gun and not need it than to need a gun and not have it. This line should also be … Continue Reading

Trade Secret Misappropriation – $taggering Numbers For Employers to Consider

Last week I attended the State Bar of Michigan’s Information Technology Law Section Seminar, Core Legal Issues in a High-Tech Business World. It was a great overall day of presentations. One presentation that stood out from a business owner’s perspective, however, was given by attorney Leigh Taggart – Protecting Software Trade Secrets. Trade Secret Misappropriation … Continue Reading

My former employer can’t prevent me from working, right? Dissecting the Enforceability of a Noncompete Agreement

After an individual’s employment is terminated and that individual begins working for a competitor or starts his or her own business, a common question asked by both the individual and the former employer is whether a noncompete agreement can be used to restrict one’s post employment opportunities.     The short answer is … well, … Continue Reading

Proposed Legislation Introduced to Restrict the Enforceability of Noncompete Agreements

Under Michigan law, noncompetition agreements (sometimes referred to as covenants not to compete or restrictive covenants) are generally enforceable as long as the restriction is reasonable as to subject matter, geographical scope, and duration. But recently proposed legislation would significantly limit Michigan’s noncompete law, which is found in Michigan’s Antitrust Reform Act (MARA), MCL 445.771 … Continue Reading

What Happens When a Noncompete Agreement is Violated? A Blueprint for Noncompete Litigation

Employers commonly require employees to execute noncompetition agreements (also referred to as covenants not to compete or restrictive covenants). Under Michigan law (MCL 445.774a), such agreements will be enforceable if reasonable. In theory, an enforceable noncompete agreement generally places certain limitations on an employee’s ability to work for a competitor or to start a competitive venture business following … Continue Reading

Recent Michigan Court Decision Highlights Weak Link in Enforcing Non-compete Agreement

A recent Michigan Court of Appeals Opinion dealt a serious blow to the enforcement of noncompete agreements. The Opinion invalidated a common provision found in such agreements and it illustrates that courts will closely scrutinize noncompete agreements for any weak links that may limit or otherwise invalidate these agreements.   Overview of Non-compete Agreements Employers … Continue Reading
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