Employee Non-Solicitation Agreement in Michigan: What You Need to Know

As a business owner in Michigan, you understand the importance of protecting your company`s interests. One way to do this is by creating an employee non-solicitation agreement. This agreement prohibits current and former employees from soliciting your customers or other employees for a certain period after leaving your company.

In Michigan, non-solicitation agreements are lawful as long as they are reasonable in scope and duration. What does this mean? The scope should be limited to the specific employees or customers that the employee had contact with during their employment. And the duration should be reasonable, meaning it shouldn`t be too long or too short.

Here are some key things to consider when creating an employee non-solicitation agreement in Michigan:

1. Define the Scope

Make sure to define the scope of the agreement clearly. This includes identifying the specific employees or customers that the agreement applies to. You should also consider the geographic scope of the agreement. For example, if your business operates in multiple states, you may want to limit the agreement to only apply to customers or employees in Michigan.

2. Determine the Duration

The duration of the agreement should be reasonable. Although there is no set rule for what is considered reasonable, many courts have found that periods between 6 months and 2 years are reasonable. Keep in mind that if you make the duration too short, it may not provide adequate protection for your company. On the other hand, if you make the duration too long, it may be considered overly restrictive and unenforceable.

3. Provide Consideration

To create a binding agreement, you must provide consideration to the employee. This means offering something of value in exchange for the employee`s agreement to the non-solicitation terms. Consideration can include a signing bonus, a pay increase, or other benefits.

4. Obtain Signatures

Make sure to obtain signatures from all employees who will be subject to the non-solicitation agreement. It`s also a good idea to offer employees the opportunity to seek legal advice before signing.

5. Enforce the Agreement

If you believe that a current or former employee has violated the non-solicitation agreement, you may have legal recourse. However, it`s important to understand that the enforcement of non-solicitation agreements can be complex and fact-specific. It`s best to consult with an experienced attorney who can advise you on the best course of action.

In conclusion, an employee non-solicitation agreement can be an effective way to protect your company`s interests in Michigan. However, it`s important to ensure that the agreement is reasonable in scope and duration, and that you provide consideration to the employee. With these considerations in mind, you can create a non-solicitation agreement that provides adequate protection for your company while respecting the rights of your employees.