Independent Contractor Non-Compete in Michigan: What You Need to Know
If you`re an independent contractor in Michigan, you may be wondering about non-compete agreements. These agreements are contracts between employers and employees or independent contractors that restrict the employee or contractor from competing with the employer for a certain period of time after the contract has ended. While non-compete agreements are common in many industries, they are not always enforceable in Michigan.
The Michigan Antitrust Reform Act (MARA) governs non-compete agreements in Michigan. Under MARA, non-compete agreements are generally enforceable if they are reasonable and necessary to protect the employer`s legitimate business interests. However, there are certain limitations on non-compete agreements in Michigan.
Firstly, non-compete agreements cannot be used to eliminate competition altogether. The agreement must be reasonable in scope, duration, and geographic area. For example, a non-compete agreement that prevents an independent contractor from working in the same industry anywhere in the United States for ten years would likely be deemed unreasonable and unenforceable.
Secondly, non-compete agreements cannot be used to prevent employees or independent contractors from using general skills and knowledge gained through their work. For example, a non-compete agreement that prevents a web developer from working for any other web development company would likely be unenforceable.
Thirdly, non-compete agreements must be supported by adequate consideration. This means that the employee or independent contractor must receive something of value in exchange for signing the non-compete agreement. For example, an independent contractor might receive a signing bonus or increased compensation in exchange for agreeing not to compete with the employer for a certain period of time.
Fourthly, non-compete agreements may not be enforced against employees or independent contractors who are terminated without cause. The agreement must specifically state that it only applies in the event of voluntary resignation or termination for cause.
In summary, independent contractor non-compete agreements are generally enforceable in Michigan if they are reasonable, necessary, and supported by adequate consideration. However, there are certain limitations on these agreements, and they may not be enforceable in all circumstances. If you are an independent contractor in Michigan and have questions about a non-compete agreement, it`s important to consult with an attorney who is experienced in employment law.