Non-Compete & Non-Solicitation Agreements in Kalamazoo

Is a former employee poaching your company's clientele or violating his or her non-compete by working for a competitor in your industry? Is your former employer accusing you of violating a non-compete or non-solicitation agreement?

At Willis Law, we can help you identify your rights and strongly advocate for them. We have extensive experience representing parties in breach of contract claims and will do everything in our power to minimize your exposure to liability.

Non-compete and non-solicitation agreements can be complex. At Willis Law, we have answers to your questions. Call our Kalamazoo non-compete lawyers toll free at (888) 461-7744 for a free initial consultation.

Non-Compete Agreement Michigan

Non-compete agreements are a common feature in employment contracts. These agreements are designed to protect the interests of employers, who invest heavily in training of new employees. As a result, they seek to restrict employees from performing similar work for a set period of time in the event they leave the company.

There is a degree of uncertainty surrounding non-compete agreements, as courts do not always uphold them. As a result, it is worth your time to discuss your situation with us if your past employer is threatening to take legal action. It may turn out that the non-compete is unreasonable and unlikely to be upheld.

Non-Solicitation Agreements in Michigan

Despite being often lumped together with non-competition agreements, these agreements are not the same thing. So, what is a non-solicitation agreement? A non-solicitation agreement allows an employee to work for a competitor, but bars them from soliciting the clients of their past employer. As is the case with non-compete agreements, agreements that are too broad in scope run the risk of not being enforced.

Are Businesses Allowed To Use Non-Compete Agreements In Michigan?

One concern a business may have is that, when its employers stop working for it, they may immediately go and work for a local competitor, thus potentially hurting the business's competitive business interests. Thus, businesses sometimes look to ways to prevent this from occurring. One legal device aimed at such prevention is the non-compete agreement. A non-compete agreement is an agreement between a business and an employee which restricts the employee from taking certain types of jobs for a time after their employment with the business ends.

Non-compete agreements are legal here in Michigan. The state law which authorizes businesses to use such agreements does specify some requirements that such agreements have to meet in order to be enforceable. Specifically, such agreements have to be reasonable when it comes to all of the following things:

• The employment/line of business that the agreement restricts the employee from working in.
• The geographic scope of the agreement's restrictions on the employee.
• The amount of time the restrictions in the agreement are in place following the worker's employment with the business ending.

When a business and an employee have a non-compete agreement in place, and the employee violates the agreement, the business will generally have legal options available to try to enforce the agreement.

There are many different issues that can come up in litigation related to attempts to enforce a given non-compete agreement. One is whether the agreement in question meets the above-mentioned reasonability requirements.

Thus, in addition to potentially being very impactful on a company's competitive business interests, enforcement litigation regarding non-compete agreements can also be very complicated. Our Kalamazoo non-compete attorneys can provide assistance to businesses when it comes to legal matters regarding the enforcement of non-compete agreements.

How Does the FTC Non-Compete Rule Affect Agreements?

As the Federal Trade Commission’s (FTC) Final Non-Compete Rule approaches its effective date of September 4, 2024, employers must understand its implications and take appropriate action to ensure compliance. The rule, which broadly bans post-employment non-compete clauses, marks a significant shift in employment law, affecting a wide range of workers, including employees, independent contractors, interns, and even sole proprietors.

Key Provisions of the FTC’s Final Rule

Under the new rule, employers will be prohibited from entering or enforcing non-compete clauses with certain workers. 

The definition of "worker" is broad and includes:

• Employees
• Independent contractors
• Externs
• Interns
• Volunteers
• Apprentices
• Sole proprietors who provide services to persons

Employers must also take proactive steps to inform workers affected by the rule that their non-compete agreements will no longer be legally enforceable. This notification must be clear, individualized, and delivered by hand, mail, email, or text on or before the effective date.

A few limited exceptions to this broad prohibition exist, such as in cases involving the bona fide sale of a business or where there is an existing cause of action related to a non-compete clause before the rule takes effect. Additionally, employers with good faith belief that the Final Rule does not apply to their specific situation may also be exempt.

Preparing for Compliance

Legal challenges to the FTC’s Final Rule may be ongoing. Still, it is strongly recommended that employers begin preparing now to ensure compliance. This preparation includes reviewing and updating existing non-compete agreements and drafting the necessary notices for affected workers.

At Willis Law, our business law attorneys are well-versed in the complexities of employment agreements and are prepared to guide employers through the changes brought about by the FTC’s Final Rule. 

We offer comprehensive services to help employers:

• Review and update existing non-compete agreements to align with the new legal requirements.
• Draft clear and compliant notices to be delivered to affected workers before the September 4, 2024 deadline.
• Provide legal advice and representation in cases where exceptions to the rule exist or legal challenges are necessary.

By partnering with us, you can remain compliant while safeguarding your interests. We are here to provide the legal support you need during this transition.

Contact the Non-Compete Attorneys in Michigan

Whether you need assistance in drafting an agreement, reviewing an agreement or facing litigation, our lawyers can make sure your rights are protected.

Contact us at (888) 461-7744 for a free initial consultation with our Michigan non-compete lawyers. We have offices in Kalamazoo, Grand Rapids, and Paw Paw.