Reasonableness test
Michigan Non-Compete Law (2026): Enforceable if reasonable
An employer in Michigan may take a non-compete so long as it protects a genuine business interest and is reasonable in how long it lasts, how much territory it covers and what line of work it touches. What sets the state apart is the remedy for overreach: the statute directs courts to trim an unreasonable covenant down to a reasonable one and then enforce it, rather than throwing it out. Reform bills have been filed in each of the last several sessions without ever leaving committee.
The rule
How Michigan treats non-compete agreements
The reformation power cuts against employees in a way that outright-void states do not: there is little downside for an employer in drafting aggressively. Note also that the antitrust rule of reason from Innovation Ventures governs only covenants between businesses — applying it to an employment covenant is a common misreading.
If you are an employer
Michigan is one of the friendlier states to draft in — an overbroad clause is likely to be narrowed rather than voided — but keep the scope defensible, because reformation is discretionary and a wildly overreaching covenant invites a court to start from scratch.
If you are a worker
Michigan enforces reasonable non-competes at every pay level, and a court that finds yours too broad will probably shrink it rather than cancel it — so negotiate the terms up front instead of counting on invalidation.
| Classification | Statutory reasonableness with judicial reformation |
|---|---|
| Pay threshold | None. Michigan draws no line by pay, hours or job level. |
| Maximum term | Nothing fixed by statute. Courts weigh duration case by case, and covenants in the six-month to three-year band are routinely sustained where the employer's interest supports them. |
| Notice or consideration | None. No advance disclosure, waiting period or right-to-counsel language is required, though the covenant must rest on adequate consideration. |
| Primary statute | MCL 445.774a (Michigan Antitrust Reform Act § 4a) |
Detail
What has changed, and what is still moving
Legislation 2024–2026
Nothing enacted in 2024, 2025 or 2026. MCL 445.774a, in force since 1985, remains the operative rule.
Bills to watch
Two measures remain formally alive in the 2025-26 session but neither has advanced. HB 4040 (introduced Jan. 30, 2025) would prohibit employee non-competes outright, sparing only workers selling an ownership stake or substantially all business assets; it has sat in the House Economic Competitiveness Committee since February 2025. HB 6119 (introduced June 18, 2026) would carve physicians out and is pending in House Government Operations.
Leading cases
Innovation Ventures, LLC v. Liquid Manufacturing, LLC, 499 Mich. 491 (2016) — business-to-business covenants are judged under the antitrust rule of reason, while employee covenants stay with MCL 445.774a. Coates v. Bastian Bros., Inc., 276 Mich. App. 498 (2007) — applies the statutory reasonableness factors and illustrates judicial narrowing.
If you have one in hand
What can make a non-compete unenforceable in Michigan
- The scope is wider than the interest behind it. A restriction that reaches beyond the customers, trade secrets or goodwill the employer can actually point to is the most common reason a covenant fails in Michigan.
Whether any of these applies turns on the wording of your own agreement, your role and the case law your court follows. This page maps the statutory landscape; it does not replace advice on a specific contract.
FAQ
Michigan non-compete questions
Are non-compete agreements enforceable in Michigan?
An employer in Michigan may take a non-compete so long as it protects a genuine business interest and is reasonable in how long it lasts, how much territory it covers and what line of work it touches. What sets the state apart is the remedy for overreach: the statute directs courts to trim an unreasonable covenant down to a reasonable one and then enforce it, rather than throwing it out. Reform bills have been filed in each of the last several sessions without ever leaving committee.
How long can a non-compete last in Michigan?
Nothing fixed by statute. Courts weigh duration case by case, and covenants in the six-month to three-year band are routinely sustained where the employer's interest supports them.
Is there a minimum salary for non-competes in Michigan?
No. Michigan sets no income floor, so pay alone does not decide whether a covenant binds you. The test is whether the restriction goes further than the employer's legitimate interest requires in time, geography and scope of work.
What notice or consideration does Michigan require?
None. No advance disclosure, waiting period or right-to-counsel language is required, though the covenant must rest on adequate consideration.
Sources
How this entry was checked
- Primary source. MCL 445.774a (Michigan Antitrust Reform Act § 4a) — the statutory text itself.
- Secondary sources consulted. MCL 445.774a (Justia), Michigan Legislature bill records (HB 4040, HB 6119), LegiScan, Miller Canfield, Dickinson Wright, Butzel Long, Foley & Lardner.
Check it against a third party
None of these is ours. If a figure here matters to a decision, verify it:
- Federal Trade Commission — non-compete hub
- Economic Innovation Group — State Noncompete Law Tracker
- Fair Competition Law (Beck Reed Riden) — 50-state legislation tracker
- GAO-23-103785 — Noncompete Agreements (May 2023)
This page is general legal information published by Jurizmo and is not legal advice, does not create an attorney-client relationship, and may not reflect amendments enacted after the review date above. Consult a licensed attorney in the relevant state before acting on any agreement.