Restrictive Covenant Agreements-“Buyer Beware!”

Restrictive Covenant Agreements


            Restrictive covenant agreements are a useful tool for any business wanting to protect their interests and assets with current and past employees.  These types of agreements commonly involve matters concerning trade secrets, non-disclosure, non-solicitation, confidentiality, and non-competition clauses. Some of these types of agreements are stand alone or are a part of an employment contract or severance package. So long as reasonable, Michigan law allows for non-compete agreements in employment (See Michigan Antitrust Reform Act, MCL 445.774a). In general, restrictive covenant agreements attempt to restrict employees who are currently employed and after a separation of employment from doing something or not doing something that they otherwise may have had a legal right to do. The most common practice of employers is to provide a restrictive covenant agreement at the time of the offer of employment or hire, but, under current Michigan case law, employers can require employees to sign a restrictive covenant agreement after the employee has already been hired. Far too often, employees are too eager to take an offer of employment and/or want to continue their employment with a business and, unfortunately, employees do not spend enough time reviewing these restrictive covenant agreements, and, it’s not until they separate their employment with a business do they realize the quagmire they might be in, especially in cases involving non-competes. Before signing any of these types of agreements, individuals should seek legal counsel for advice.  .

Mistakes made by Employers that a Plaintiff’s Lawyer Loves to See

There are certain mistakes made by employers that a plaintiff’s lawyer loves to discover. Below is a short list of common errors made by employers in the workplace that are avoidable.

Pre-Employment Mistakes

  • Failure to conduct an adequate background check
  • Inconsistent recruiting and hiring practices
  • Inappropriate interview questions

Mistakes During Employment

  • Failure to pay and identify exempt vs. non-exempt employees
  • Failure to implement, disseminate, and follow personnel policies or procedures
  • Failure to train employees
  • Failure to provide job descriptions
  • Failure to document promptly and accurately discipline or performance issues
  • Failure to provide employee performance reviews
  • Failure to provide employees notice under state or federal law when the law requires

Post-Termination Mistakes

  • Not conducting exit interviews
  • Not making timely payments of all wages due the employee
  • Inappropriate internal and external comments
  • Failure to provide post-termination required notices under state or federal law