Before examining the reasonableness of a noncompetition agreement, courts first consider whether the agreement is ancillary, meaning connected and subordinate to another valid contract. If there is no such contract, the court will look to see if there was valid consideration to enforce such an agreement. If there is no adequate or independent consideration present, most courts will refuse to enforce such an agreement. This is to ensure that the noncompetition agreement is not an outright restraint on trade but, rather, the result of a bargained-for exchange that furthers legitimate commercial interests.
When a businessman sells his business, the purchaser may compete with him unless there is a valid restrictive covenant or covenant not to compete. The same is true when an employee leaves the employment of a company and begins soliciting customers of his former employer or competing with his employer in a similar way. When an ongoing business is sold, it is commonly stated in the sales contract that the seller shall not go into the same area or begin a similar business within a certain geographical area or for a certain period of time or both. Such an agreement can be valid and enforceable.
Restrictions to prevent competition by a former employee are held valid when they are reasonable and necessary to protect the interests of the employer. Courts will closely examine covenants not to compete signed by individuals in order to make sure that they are not unreasonable as to time or geographical area.
When a restriction of competition is invalid because it is too long or covers too great a geographical area, Courts will generally do one of two things. Some Courts will trim the restrictive covenant down to a period of time or geographical area that the Court deems reasonable. Other Courts will refuse to enforce the restrictive covenant at all and declare it void.
Caution: Statutory law in a few states completely prohibit covenants not to compete unless the covenant meets the state's statutory guidelines.
Oakland County, Michigan is a vibrant region located in the southeastern part of the state. It is home to numerous cities and townships and is known for its diverse population, thriving business community, and beautiful natural surroundings. One crucial legal document commonly used in Oakland County, specifically in employment settings, is the Oakland Michigan General Non-Competition Agreement. A General Non-Competition Agreement, also referred to as a non-compete or non-competition clause, is a legal contract entered into by employers and employees to protect the employer's business interests. This agreement restricts the employee from engaging in certain competitive activities, such as working for a direct competitor or starting a similar business, for a specified period of time within a designated geographical area. In Oakland County, Michigan, there may be different types of General Non-Competition Agreements depending on the industry and specific circumstances. Some common variations include: 1. Employment Non-Competition Agreement: This type of agreement is typically used when an employee is hired and aims to prevent that employee from leaving and directly competing with the employer. It may specify a time frame during which the employee cannot work for a direct competitor within a certain radius of the employer's location. 2. Business Sale Non-Competition Agreement: When a business is sold, the new owner may require the seller to sign a non-competition agreement to prevent them from starting a similar business that would compete with the new owner's business. This type of agreement usually includes a broader geographical restriction to protect the buyer's investment. 3. Contractor Non-Competition Agreement: Contractors or consultants who work with businesses in Oakland County may also be subject to non-competition agreements. This ensures that contractors do not directly compete with the business they provide services to or share sensitive information with competitors. 4. Partnership Non-Competition Agreement: In situations where multiple parties enter into a partnership or joint venture, a non-competition agreement may be necessary to protect the interests of all partners. This agreement can define restrictions on competition among the partners during and after the partnership. It is important to note that the enforceability of non-competition agreements in Oakland County, Michigan, and throughout the state can vary depending on several factors, such as reasonableness of the restrictions, protection of legitimate business interests, and overall fairness. Therefore, it is advisable for both employers and employees to seek legal advice when drafting, negotiating, or signing such agreements to ensure compliance with applicable laws and protect their respective interests.Oakland County, Michigan is a vibrant region located in the southeastern part of the state. It is home to numerous cities and townships and is known for its diverse population, thriving business community, and beautiful natural surroundings. One crucial legal document commonly used in Oakland County, specifically in employment settings, is the Oakland Michigan General Non-Competition Agreement. A General Non-Competition Agreement, also referred to as a non-compete or non-competition clause, is a legal contract entered into by employers and employees to protect the employer's business interests. This agreement restricts the employee from engaging in certain competitive activities, such as working for a direct competitor or starting a similar business, for a specified period of time within a designated geographical area. In Oakland County, Michigan, there may be different types of General Non-Competition Agreements depending on the industry and specific circumstances. Some common variations include: 1. Employment Non-Competition Agreement: This type of agreement is typically used when an employee is hired and aims to prevent that employee from leaving and directly competing with the employer. It may specify a time frame during which the employee cannot work for a direct competitor within a certain radius of the employer's location. 2. Business Sale Non-Competition Agreement: When a business is sold, the new owner may require the seller to sign a non-competition agreement to prevent them from starting a similar business that would compete with the new owner's business. This type of agreement usually includes a broader geographical restriction to protect the buyer's investment. 3. Contractor Non-Competition Agreement: Contractors or consultants who work with businesses in Oakland County may also be subject to non-competition agreements. This ensures that contractors do not directly compete with the business they provide services to or share sensitive information with competitors. 4. Partnership Non-Competition Agreement: In situations where multiple parties enter into a partnership or joint venture, a non-competition agreement may be necessary to protect the interests of all partners. This agreement can define restrictions on competition among the partners during and after the partnership. It is important to note that the enforceability of non-competition agreements in Oakland County, Michigan, and throughout the state can vary depending on several factors, such as reasonableness of the restrictions, protection of legitimate business interests, and overall fairness. Therefore, it is advisable for both employers and employees to seek legal advice when drafting, negotiating, or signing such agreements to ensure compliance with applicable laws and protect their respective interests.
