Tag Archives: employee noncompete agreement

Revising Non-compete Law to Eliminate Unfair Competition

Non-compete agreements are intended to prevent unfair competition. But they often create unfair advantages against employees and start-ups. And these unfair advantages adversely affect individuals and the overall economy. At least that is the take-away from a recent op-ed in the New York Times. Noncompete Restrictions and the Economy Specifically, Prof. Orly Lobel wrote in Companies Compete but … Continue Reading

Buying or Selling a Business? Don’t Forget to Consider Employment and Non-compete Agreements.

The decision to sell a company involves many considerations. One important – but often overlooked – consideration is the value that should be derived from having enforceable employee and non-compete agreements. However, all too often, due diligence fails to critically assess the enforceability or transferability of non-compete restrictions. As discussed below, the value of the … Continue Reading

Michigan Court Orders Former Employee to Give Up Company, Move it, or Shut it Down After Violating Noncompete Agreement

Not many people would jump out of a plane and then worry about figuring out what to do about a parachute on the way down. But often times individuals take that approach when it comes to starting a new business or taking a job after having signed a non-compete agreement. And that lack of planning can … Continue Reading

Is Your Non-Compete Agreement Enforceable? Depends on What Law Applies.

A recent Delaware court case invalidating an employer’s non-compete agreement provides a cautionary reminder for companies with operations and employees in multiple states. Specifically, in Ascension Ins. Holdings, LLC v. Underwood (Delaware, Jan. 28, 2015) the company, Ascension was incorporated in Delaware, but headquartered in California. California was also where the employee, Roberts Underwood worked. … Continue Reading

Proposal Would Significantly Limit Use of Noncompete Agreements in Michigan

A proposed Michigan House Bill was recently introduced that would significantly limit the use of noncompete agreements (sometimes called covenants not to compete) in Michigan. Such agreements often restrict individuals from working for a competitor or other post-employment activities. Specifically, State Represntative Peter Lucido (R) introduced HB 4198 on February 12, 2015, which has since been referred … Continue Reading

Michigan Experiments with Business Courts

It is not often that the legal system and innovation are used (positively) in the same sentence. However, Michigan has implemented a statewide innovative “business court” system to handle legal disputes that fall into a number of categories associated with business matters. I’m currently sitting in Wayne County Circuit Court’s Business Court for a breach … 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
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