Michigan Non-Compete Laws (2026): Are Non-Competes Enforceable?

Michigan enforces employee non-competes that are reasonable. Under MCL 445.774a, part of the Michigan Antitrust Reform Act, an employer may obtain a covenant that protects its reasonable competitive business interests if the covenant is reasonable as to its duration, geographical area, and the type of employment or line of business. If a court finds a covenant unreasonable, the statute lets the court limit it and enforce it as limited.

No Michigan statute currently bans non-competes for any group of workers, and three bills that would do so remain in committee. For how other states treat these agreements, see our non-compete laws by state guide.

Information last verified on 2026-10-08. This article has not been reviewed by a licensed lawyer.

Jurisdiction scope: This article covers Michigan's non-compete statute, MCL 445.774a, and the Michigan Court of Appeals decisions applying it to employees, with a short note on the federal FTC rule. It does not cover trade-secret claims (see Michigan trade secret laws), severance pay (see Michigan severance pay laws), or non-competes between businesses or in the sale of a business.

Are non-competes enforceable in Michigan?

Yes, if they are reasonable. Michigan addresses employee non-competes directly in a statute. MCL 445.774a(1) provides:

"An employer may obtain from an employee an agreement or covenant which protects an employer's reasonable competitive business interests and expressly prohibits an employee from engaging in employment or a line of business after termination of employment if the agreement or covenant is reasonable as to its duration, geographical area, and the type of employment or line of business. To the extent any such agreement or covenant is found to be unreasonable in any respect, a court may limit the agreement to render it reasonable in light of the circumstances in which it was made and specifically enforce the agreement as limited." MCL 445.774a(1)

Under MCL 445.774a(2), the section applies to covenants and agreements entered into after March 29, 1985. The official Michigan Compiled Laws page, current through Public Act 103 of 2026, shows the section was added by 1987 PA 243 and lists no later amendment.

What makes a Michigan non-compete reasonable

The statute names four things a court looks at. The covenant must protect the employer's reasonable competitive business interests, and it must be reasonable as to:

The business interest has to be more than avoiding competition. In St. Clair Medical, P.C. v. Borgiel, 270 Mich. App. 260 (2006), the Court of Appeals said a covenant must protect against the employee "gaining some unfair advantage in competition with the employer, but not prohibit the employee from using general knowledge or skill."

The statute sets no maximum length or distance. Courts decide each covenant on its facts. In Coates v. Bastian Brothers, Inc., 276 Mich. App. 498 (2007), the Court of Appeals explained that the statute revived the common-law reasonableness standards and stated: "The burden of demonstrating the validity of the agreement is on the party seeking enforcement."

Protecting confidential information can be a legitimate interest. In Rooyakker & Sitz, PLLC v. Plante & Moran, PLLC, 276 Mich. App. 146 (2007), the Court of Appeals held that preventing the anti-competitive use of confidential information is a legitimate business interest, and it upheld a two-year restriction on accountants soliciting or serving the firm's clients.

What a court can do with an overbroad non-compete

A Michigan court does not have to choose between enforcing a covenant exactly as written and voiding it. The second sentence of MCL 445.774a(1) says that if a covenant "is found to be unreasonable in any respect, a court may limit the agreement to render it reasonable in light of the circumstances in which it was made and specifically enforce the agreement as limited."

So a covenant that reaches too far, too long or too wide can still be enforced in a narrower form that the court finds reasonable. The word "may" means the court decides whether to limit it.

Signing a non-compete after you start work

For an at-will employee, Michigan courts treat keeping the job as enough. In QIS, Inc. v. Industrial Quality Control, Inc., 262 Mich. App. 592 (2004), the Court of Appeals stated: "Mere continuation of employment is sufficient consideration to support a noncompete agreement in an at will employment setting."

The same case came out the other way for employees who, under a collective bargaining agreement, could be fired only for just cause. Because refusing to sign would not have been just cause to fire them, the court agreed that they received no adequate consideration and the agreement was void.

If you are fired or laid off

Michigan has no statute that cancels a non-compete when the employer ends the job. In Coates, the employer had fired the employee without cause. The Court of Appeals held that this did not stop the employer from enforcing the covenant: "Bentley is not barred from enforcement of the noncompetition clause by reason of its first breach."

The court relied on the clause's own wording, which barred competition "regardless of the reason for the termination" of employment, and it also noted that the employee had not preserved the argument at trial. How a covenant applies after a firing can turn on its exact terms.

That holding does not mean every covenant survives a firing. The covenant still has to be reasonable under MCL 445.774a, and the result depends on the facts. For how at-will employment works in the state, see Michigan at-will employment laws.

Physicians and other professionals

No Michigan statute in force bans or caps physician non-competes, and courts have enforced them. In St. Clair Medical, P.C. v. Borgiel, 270 Mich. App. 260 (2006), the Court of Appeals affirmed enforcement of a physician's covenant under MCL 445.774a(1). The court found the restriction "modest in geographical scope," held it was not unreasonable in relation to the practice's competitive business interests, and found it was not specially injurious to the public, noting that the modest scope and a liquidated damages clause protected patient choice.

Two pending bills would change that for physicians (see the bills section below). Until one is enacted, the reasonableness test in MCL 445.774a applies to physicians the same way it applies to other employees. Lawyers are a separate case: Michigan Rule of Professional Conduct 5.6 bars a lawyer from offering or making a partnership or employment agreement that restricts a lawyer's right to practice after the relationship ends, except an agreement about retirement benefits or a sale permitted by Rule 1.17.

Income thresholds and who is covered

The text of MCL 445.774a contains no income or job-classification threshold. That statement rests on the text of this section; we did not search the whole Michigan code for other provisions.

Non-competes between businesses

Courts treat a non-compete between two businesses differently from one signed by an employee. In Innovation Ventures, LLC v. Liquid Manufacturing, LLC, 499 Mich. 491 (2016), the Michigan Supreme Court held that "a commercial noncompete provision must be evaluated for reasonableness under the rule of reason." That case involved a business-to-business agreement, not an employee covenant, which MCL 445.774a governs.

Pending Michigan non-compete bills

Three House bills in the 2025-2026 session would ban or limit non-competes. As of October 8, 2026, the legislature's site listed no action on any of them after committee referral. None is law, and each description below is of the bill as introduced.

As introduced, HB 4040 would still allow confidentiality and trade-secret agreements, and would allow a non-solicitation term only if the worker earns more than 200% of the federal poverty line for a family of three and the term expires within one year. It would apply to agreements entered into before, on or after enactment and would take effect 90 days after enactment. The House Fiscal Agency's analysis of HB 6119 describes the bill the same way as the summary above.

The FTC rule and Michigan non-competes

The FTC's nationwide non-compete rule never took effect. A federal court in Texas set it aside on August 20, 2024 (Ryan, LLC v. FTC, No. 3:24-CV-00986-E, N.D. Tex.), the FTC voted on September 5, 2025 to dismiss its appeals, and the FTC removed the rule from the Code of Federal Regulations on February 12, 2026. The FTC still acts case by case, for example approving a final order on June 22, 2026 that required a pest-control company to stop enforcing non-competes. More detail: FTC non-compete ban struck down and our non-compete laws by state guide.

Questions this page does not answer yet

Our research did not verify Michigan rules on the following, so this page does not state a rule on any of them:

• whether a Michigan court will honor an out-of-state choice-of-law or forum clause in a current agreement;
• separate rules for confidentiality agreements.

MCL 445.774a does not create an agency enforcement process or any penalty or damages remedy for employees, and we did not identify a state agency that handles non-compete complaints.

Non-competes and trade secrets

A non-compete is a contract; trade-secret protection is a separate body of law that does not depend on one. See Michigan trade secret laws.

If you have been asked to sign

Because MCL 445.774a turns on reasonableness and lets a court narrow a covenant rather than void it, whether a particular agreement holds up depends on its length, territory, the work it restricts and the business interest it protects. A lawyer licensed in Michigan can review a specific agreement against those factors.

Related

• Non-compete laws by state
• Michigan trade secret laws
• Michigan severance pay laws
• Michigan at-will employment laws
• FTC non-compete ban struck down

Disclaimer: This article provides general legal information about Michigan non-compete law under MCL 445.774a and the Michigan Court of Appeals decisions applying it, not legal advice. The information was last verified on 2026-10-08. Michigan non-compete disputes are decided by the courts; for advice about a specific agreement, contact a legal aid office or a lawyer licensed in Michigan.

Last updated: 2026-10-08.

Frequently Asked Questions

Are non-competes enforceable in Michigan?

They can be. MCL 445.774a allows an employee non-compete that protects the employer's reasonable competitive business interests and is reasonable as to duration, geographical area, and the type of employment or line of business.

Can a Michigan court rewrite an unreasonable non-compete?

Yes. Under MCL 445.774a(1), a court may limit an unreasonable covenant to render it reasonable and specifically enforce it as limited.

Does a non-compete still apply in Michigan if I was fired?

It can. In Coates v. Bastian Brothers, Inc. (2007), the Court of Appeals held that the employer's firing of the employee without cause did not by itself bar enforcement of the noncompetition clause, which applied regardless of the reason employment ended. The outcome can turn on the clause's exact wording and the facts.

Is there a salary threshold for Michigan non-competes?

Not in current law. The text of MCL 445.774a has no income or job-classification threshold. HB 4040 of 2025 would add an earnings condition for some non-solicitation terms, but it has only been introduced.

Can a Michigan doctor be bound by a non-compete?

Yes, under current law. The Court of Appeals enforced a physician's covenant in St. Clair Medical, P.C. v. Borgiel (2006). HB 4514 and HB 6119 would restrict physician non-competes, but as of October 8, 2026 both were only in committee.

Did Michigan ban non-competes in 2025 or 2026?

No. HB 4040, introduced January 30, 2025, would bar most worker non-competes, but as of October 8, 2026 it had only been referred to the House Committee on Economic Competitiveness. MCL 445.774a still governs.

Who has to prove a Michigan non-compete is valid?

The party seeking enforcement, usually the employer. Coates v. Bastian Brothers, Inc. (2007) placed the burden of demonstrating validity on that party.

Does the FTC non-compete ban apply in Michigan?

No. A federal court set the FTC rule aside on August 20, 2024, and the FTC removed it from the Code of Federal Regulations on February 12, 2026.