Michigan non-compete law: MCL 445.774a for recruiters

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 duration, geographical area and the type of employment or line of business, and a court that finds one unreasonable may cut it down and enforce the narrower version. As of October 2026, Michigan has no salary threshold, no advance-notice rule and no statute limiting non-competes for physicians or other health care workers; three House bills that would change parts of that are sitting in committee.

For a recruiter, the practical meaning is that a Michigan candidate's non-compete rarely disappears on its own. It may get narrower, and the questions you ask decide whether the hiring company hears about it before the offer or from the former employer's lawyer. The general screen is in non-compete questions for candidates, and the agency and client clauses are in non-solicitation clauses for recruiters.

What does Michigan law say about non-competes?

The rule is a single section, MCL 445.774a (section 4a of 1984 PA 274). Subsection (1) says an employer may obtain from an employee an agreement that "protects an employer's reasonable competitive business interests" and bars the employee from an employment or line of business after the job ends, if the agreement is "reasonable as to its duration, geographical area, and the type of employment or line of business." Subsection (2) applies the section to agreements entered into after March 29, 1985. The section was added by 1987 PA 243.

Three things are missing from the statute that recruiters often expect to find there: there is no minimum salary, no rule that the covenant be given to the candidate days before the offer, and no list of banned occupations. Those are the levers Illinois, Colorado and Washington use. Michigan uses reasonableness and judicial discretion instead.

Michigan courts fill in what "reasonable competitive business interests" means. In Bristol Window & Door, Inc. v. Hoogenstyn (Mich. Ct. App. 2002), the Court of Appeals described the protected interest as guarding against a former employee gaining an unfair advantage, such as through confidential information or customer relationships built on the employer's time, rather than stopping ordinary competition or the use of general skill and knowledge. In Innovation Ventures, LLC v. Liquid Manufacturing, LLC (Mich. 2016), the Michigan Supreme Court held that section 4a governs covenants between employers and employees, while non-competes in commercial deals between businesses are judged under the Act's general rule of reason.

Can a Michigan court rewrite an overbroad covenant?

Yes, but it does not have to. The last sentence of subsection (1) says that if a covenant is found 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." Two points follow for hiring:

• A broad clause can still bind. A two-year, statewide restriction may be cut to a shorter period or to the counties or customers the candidate actually covered, and then enforced. "It looks too broad" is not a reason to tell a client the risk is gone.
• The outcome is less predictable than in a mandatory-reformation state. Texas says its courts "shall" reform; Michigan says "may." Whether a judge narrows a clause or declines to enforce it at all depends on the facts, which is exactly why the hiring company's counsel, not the recruiter, should read the agreement.

Example only: a Grand Rapids sales manager signed an 18-month non-compete covering "the State of Michigan and any state where the company does business." A court might limit it to 12 months and the territory the manager sold into, and enforce that. The candidate is still restricted, just more narrowly.

Are non-solicitation clauses treated the same way?

Generally, yes. Michigan courts have applied the same reasonableness analysis to clauses that stop a former employee from soliciting or serving the employer's clients; in Rooyakker & Sitz, PLLC v. Plante & Moran, PLLC (Mich. Ct. App. 2007), the Court of Appeals reviewed a client non-solicitation provision for an accounting firm under that standard. For recruiting, that means a candidate who "only" has a customer non-solicit is not automatically free to bring their book of business. The client should know which customers are covered before it builds a territory plan around them.

Employee non-solicits (no recruiting your former colleagues) matter to agencies twice over: they can limit a newly placed manager who wants to hire their old team, and they can sit in your own recruiters' agreements. Client no-hire clauses between companies raise separate antitrust questions, covered in no-poach agreements and antitrust law.

Does Michigan limit non-competes for physicians and other health care workers?

Not yet. As of October 2026, physicians, nurses and other clinicians in Michigan are covered by the same section 4a test as everyone else. Three bills on the Legislature's site would change that, and all three are in committee:

Healthcare recruiters placing Michigan physicians should therefore treat a physician's non-compete exactly like any other: collect the facts and let counsel weigh it. If one of these bills moves, the effective date and whether it reaches existing agreements will matter more than the headline. Neighboring states have gone further; compare Ohio, Wisconsin and Illinois.

Michigan non-compete rules at a glance

What should a recruiter ask a Michigan candidate?

Ask the same restrictive-agreement question of every candidate for the role, early in the phone screen, and write down facts only. Counsel needs what drives the section 4a analysis: what the covenant covers, how long, where, and what interest the old employer can point to.

MICHIGAN CANDIDATE — restrictive agreements

1. "Have you signed a non-compete, a customer or employee non-solicit,
    or a confidentiality agreement with your current or a past employer?"
2. "How long does it last after you leave, and what area, customers
    or type of work does it cover?"
3. "What was it part of: your offer, a promotion, a bonus or equity
    plan, or the sale of a business?"
4. "Does it say which state's law applies or where disputes go?"
5. "Which customers or accounts did you personally handle?"
6. "Has your employer said anything about enforcing it?"
Always: "We don't want any confidential information, documents or
client lists from your current employer."

• Do not say "Michigan doesn't enforce those." It does, when they are reasonable, and a court may narrow a broad one rather than void it.
• Do not ask the candidate to forward documents their agreement says are confidential, or to walk you through their employer's pricing or pipeline.
• Do record "12-month non-compete, west Michigan, signed 2024 with a promotion" rather than "probably fine."

What is the risk to the hiring company?

The realistic outcome of a Michigan dispute is an injunction that keeps the new hire away from certain customers, territory or work for a period, possibly in a narrowed form. That can strand a placement after the start date. Former employers sometimes also name the new employer, for example claiming it interfered with the contract or received confidential information; how that plays out depends on what the new employer knew and did, which is a question for its counsel.

Steps that lower the risk: tell the client about any covenant before final interviews, let its counsel review the agreement before the offer, scope the first months of the role away from restricted customers where possible, and repeat in writing at the offer that the company wants no confidential information. The offer call script is the place to confirm that.

Where does the federal FTC rule stand?

It does not apply. The FTC's Noncompete Rule page records that a federal court set the rule aside on August 20, 2024; on September 5, 2025 the Commission voted 3-1 to dismiss its appeals and accede to the vacatur; and a February 12, 2026 Federal Register notice removed it from the Code of Federal Regulations. The FTC still brings case-by-case actions, such as its April 2026 action against Rollins, Inc. Michigan covenants are governed by Michigan law.

Staffing agencies and their own agreements

When you place a candidate, the candidate's covenant is mainly the client's risk. When your agency asks its own recruiters to sign a non-compete or client non-solicit, section 4a applies to you as the employer, and the same reasonableness test decides whether it holds. For the other Michigan rules that touch a hire, see hiring employees in Michigan, the Michigan staffing agency license guide and Michigan background check laws.

A Michigan checklist

• Restrictive-agreement question asked of every candidate for the role, in the same words.
• Facts recorded: type, length, area or customers, what it was tied to, governing-law clause, date signed.
• No opinion on enforceability given; candidate pointed to their own lawyer.
• Hiring company told before final interviews; counsel reviews the agreement before the offer.
• "No confidential information" said at the screen and again at the offer.
• Healthcare roles: bill status for HB 4514 and HB 6119 re-checked before relying on this page.