On November 9, 2016 House Bill 6017 was introduced in the Michigan House of Representatives. If passed it would limit the enforceability of a non-competition agreement signed between an employer and an employee.
I have spent several articles discussing the legal consequences/enforceability issues of non-competes.
It appears the Legislature is wrestling with the question posed by Nick Manes of MIBiz in an article a few years back: “Are noncompetes a barrier to growth?
Check out the text of the bill here
The Bill was referred to the committee on commerce and trade.
The Bill is rather short – and has only two key components to it:
1. Require Employers to follow a Specific Procedure prior to enforcing a non-compete.
The Bill would only permit Employers to enforce a non-competition agreement if the Employer followed a procedure, including:
(A) INFORMED THE PROSPECTIVE EMPLOYEE IN WRITING OF THE REQUIREMENT AT OR BEFORE THE TIME OF THE INITIAL OFFER OF EMPLOYMENT.
(B) IN ANY POSTING OR ADVERTISEMENT FOR THE EMPLOYMENT, GIVEN NOTICE THAT ACCEPTANCE OF THE AGREEMENT OR COVENANT IS A CONDITION 1 OF EMPLOYMENT.
2. Non-Compete only Enforceable if the Employee voluntarily resigns.
Further, under the Bill an employer can only enforce the non-compete if, among other things, the employee has voluntarily resigned. Stated another, way, a non-compete would be unenforceable if the Employer terminated the employee.
A Bill was introduced back in February that somewhat mirrors this Bill, but has other restrictions. That Bill never came back from the committee on Trade and Commerce.
We will see if HB 6017 is able to gain any more traction – since it is now also sitting in the committee on Trade and Commerce.
Questions? Comments?
e-mail: Jeshua@dwlawpc.com
Twitter: @JeshuaTLauka
Purpose Driven General Counsel 
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