Michigan Noncompete LawsuitsIt 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 of contract, non-compete, and related claims. This court includes Detroit and surrounding metro areas. The Michigan Supreme Court appointed Judge Daniel Ryan, Judge Susan Borman, and Judge Brian Sullivan as the designated Business Court Judges for Wayne County.

A few of the requirements for business court cases in general include:

  • All Business Court cases must be eFiled and will be assigned by blind draw to one of these judges.
  • If the case involves a business or commercial dispute as defined in the Business Court Act, MCL 600.8031, pursuant to MCR 2.112(O), parties must verify that the case is subject to being assigned to the Business Court. Breaches of noncompete and employment agreements fall into this category.
  • When filing a Business Court case, the party filing a complaint must give written notice with the initial pleading that the case qualifies for the Business Court. 
  • Parties are required to attach a Notice of Assignment to the Business Court form to the complaint (or responsive pleading if the case qualifies for the Business Court but was not noticed as such in the initial complaint, or if the counterclaim qualifies the case as a Business Court case.
  • Effective September 1, 2014, if a Business Court case is not identified as such using the Notice of Assignment or otherwise verified, and it is later identified as such, a sanction of up to $100 may be assessed after a hearing pursuant to MCR 2.114 as set forth in the Business Court Eligibility/Show Cause Order.

For more information on what criteria to use in determining whether a case qualifies as a business Court Case see this link – Notice of Business Court Implementation. For more on the Wayne County Circuit Court’s E-Filing Guidelines, please see Wayne County Circuit Court’s website.

Closing Thoughts on Michigan Business Courts

My law firm has represented clients in all three major Metro Detroit Business Courts: Wayne County, Oakland County, and Macomb County. These matters involved non-compete disputes, breach of contract claims, and related business disputes.

Based on this experience, the common focus businesses will find is on early settlement discussions and an expedited (comparatively speaking) litigation schedule. For example, in one noncompete dispute pending in Wayne County Circuit Court, the judge ordered dispositive motions presenting any questions of law to be filed prior to a settlement conference that was scheduled shortly after the complaint and answer being filed. While such an aggressive approach is not always successful, it was in this instance in that the case settled for something close to nuisance value and an amount well short of the cost of conducting discovery.

In another business court case in Oakland County, the parties were given a shortened discovery schedule and the case settled at mediation approximately 8 months later – a time frame equivalent to a competitive 100 yard dash time.

Litigants in business courts will also find that judges are more active in trying to resolve discovery disputes. In another matter, in Macomb County Circuit Court, our judge told the attorneys that before any motions could be filed, to first contact his office with the intent being to first try and resolve the matter without the need for preparing, filing, and appearing at a hearing on the motion.