There are three main ways to get out of a non-compete agreement: negotiate a written release from your employer, show that the restriction is unenforceable, or structure your next role so it falls outside what the agreement actually prohibits. In Michigan, a non-compete is enforceable only if it protects the employer’s reasonable competitive business interests and is reasonable in duration, geographic area, and the type of employment or line of business (MCL 445.774a). And the nationwide federal ban many employees heard about is not coming: a court set aside the FTC’s 2024 rule, and the agency dropped its appeals in September 2025.
The right path depends on the wording of your agreement, your role, and the state whose law applies. Treat what follows as a road map for a conversation with counsel, not a substitute for one.
Step 1: Read What the Agreement Actually Restricts
Many employees assume they are barred from an entire industry when the agreement is much narrower. Before you challenge anything, identify:
- Which activities are restricted, such as working for a competitor, starting a competing business, soliciting customers, or recruiting former coworkers
- How long the restriction lasts and when the clock starts
- The geographic area or customer list the restriction covers
- Which state’s law governs and where disputes must be filed
- Whether the agreement addresses termination without cause, assignment to a buyer of the business, or extension of the restricted period during a breach
Also locate every version you signed. Restrictive covenants sometimes appear in offer letters, equity grants, or bonus agreements as well as in a stand-alone non-compete.
A non-solicitation or confidentiality clause may survive even if the non-compete falls, so plan around every restrictive covenant, not only the one labeled “non-compete.” If you plan to open your own company, our article on starting a business after your non-compete expires addresses timing issues.
Step 2: Ask for a Release or Modification
The fastest exit is often a negotiated one. Employers sometimes agree to waive or narrow a non-compete when the new position does not truly compete, when the employee was laid off, or when litigation would be costly and uncertain. A release should be in writing, signed by someone with authority, and specific about what is being waived. Common compromises include shortening the restricted period, carving out particular customers, or replacing the non-compete with a narrower non-solicitation obligation.
Your new employer may also have a stake in the outcome. Some hiring companies will join the discussion or agree to keep you away from certain accounts for a period of time to reduce the risk of a lawsuit.
Step 3: Test Whether the Non-Compete Is Enforceable
If negotiation fails, the question becomes whether a court would enforce the agreement. Michigan’s standard comes from the Antitrust Reform Act, which allows an employer to obtain a covenant that “protects an employer’s reasonable competitive business interests” and restricts post-employment work only if it is “reasonable as to its duration, geographical area, and the type of employment or line of business.”
Does It Protect a Legitimate Business Interest?
The statute protects reasonable competitive business interests, not an employer’s general desire to avoid competition. Employers usually point to confidential information, trade secrets, or customer relationships the employee developed on the company’s behalf. An employee who had no access to sensitive information and little meaningful customer contact has a stronger argument that the restriction protects nothing the law recognizes.
Are the Duration, Geography, and Scope Reasonable?
Michigan’s statute does not set a maximum duration or distance. Reasonableness is measured against the interest being protected, so a restriction covering territories where the employer does no business, or barring work unrelated to what the employee actually did, is more vulnerable to challenge. The statute also ties reasonableness to “the circumstances in which it was made,” so the facts at signing matter, not just your situation today.
Will the Court Rewrite It Instead of Voiding It?
Do not assume an overbroad clause simply disappears. MCL 445.774a expressly provides 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.” An overly long or geographically sweeping restriction may be narrowed rather than thrown out, which is why a challenge built only on overbreadth can backfire.
Was There Adequate Consideration?
Every contract requires consideration. For at-will employees, the Michigan Court of Appeals has held that “mere continuation of employment is sufficient consideration to support a noncompete agreement” (QIS, Inc. v. Industrial Quality Control, Inc., 262 Mich App 592 (2004)). The same court reached the opposite result for employees who could be discharged only for just cause and were asked to sign a non-compete after starting work, because refusing to sign would not have been just cause for termination. If you were not an at-will employee when you signed, that distinction matters.
Where the Federal Non-Compete Ban Stands
In April 2024, the Federal Trade Commission issued a rule that would have banned most non-compete agreements nationwide beginning September 4, 2024. On August 20, 2024, in Ryan, LLC v. FTC, the U.S. District Court for the Northern District of Texas held the rule unlawful and set it aside, finding that the FTC exceeded its statutory authority and that the rule was arbitrary and capricious. On September 5, 2025, the Commission voted 3-1 to dismiss its appeals in the Fifth and Eleventh Circuits and accede to the vacatur of the rule. Our earlier post on the Texas court decision invalidating the FTC rule covers the ruling in more detail.
The practical result is that state law continues to decide whether your non-compete can be enforced against you.
State Law Trends That May Help
State legislatures remain active on this issue. Minnesota, for example, enacted Minn. Stat. § 181.988, which voids most non-competes with employees and independent contractors entered into on or after July 1, 2023. If your agreement selects another state’s law, or you live and work somewhere with stronger employee protections, the choice-of-law question can change the entire analysis.
In Michigan, House Bill 4040, introduced on January 30, 2025, would sharply restrict non-compete agreements with workers. The Legislature’s records show the bill was referred to the House Committee on Economic Competitiveness and has not advanced, so MCL 445.774a’s reasonableness standard still governs. For a broader overview, see our article on whether employee non-compete agreements are legal.
Mistakes That Make Non-Compete Cases Worse
- Starting a competing job without first evaluating the agreement. Employers often ask a court for a temporary restraining order or preliminary injunction at the outset of a case.
- Taking files, customer lists, or other confidential information on the way out. That conduct can turn a weak non-compete case into a strong trade secret claim.
- Ignoring a cease-and-desist letter. Respond, ideally through counsel, and preserve relevant documents.
- Assuming the agreement is void because another state bans non-competes. Governing-law and forum clauses matter.
Talk to a Non-Compete Attorney Before You Move
The best time to address a non-compete is before you resign or accept an offer. An attorney can assess enforceability, negotiate a release, advise your new employer, and, if necessary, defend an injunction action or ask a court to declare the agreement unenforceable.
To make that first consultation productive, bring the signed agreement and any related documents, anything showing whether you were an at-will employee, a description of your duties and customer contacts, and details about the new position. Those facts drive the reasonableness and consideration analysis under Michigan law. Employees and employers in Northern Michigan can bring those documents to a Traverse City business lawyer.
Whether you want out of a non-compete or need an enforceable one for your business, the non-compete agreement attorneys at Revision Legal can help. Contact us through the form on this page or call (855) 473-8474.
