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Noncompete Agreements Under Michigan Law

24 Michigan Bar Journal December 2016 commercial noncompetes are governed by the antitrust rule of reason, not by the employment reasonableness testIn Innovation Ventures, LLC v Liquid Manufacturing, LLC,2 the Michigan Supreme Court held that a commercial noncom-pete provision must be evaluated for reasonableness Under the rule of reason. 3 The trial court and the Court of Appeals had held that a Noncompete between businesses was governed by the reasonableness test for employee noncompetes. The Su-preme Court reversed, holding:The Court of Appeals erred by applying the standard articu-lated in MCL , which is the proper framework to evaluate the reasonableness of Noncompete Agreements be-tween employees and employers.

of the business relationship between two companies was suf - ficient consideration for their commercial noncompete, but “decline[d] to address in this case whether failure of consid-eration applies to at-will employees who sign a noncompete agreement after an at-will employment has started.”29

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