February 3, 2016, Introduced by Rep. Lucido and referred to the Committee on Commerce and Trade.
A bill to amend 1984 PA 274, entitled
"Michigan antitrust reform act,"
by amending section 4a (MCL 445.774a), as added by 1987 PA 243.
THE PEOPLE OF THE STATE OF MICHIGAN ENACT:
Sec.
4a. (1) An Subject to
subsections (2) to (7), an employer
may
obtain from an employee an a
noncompete agreement or covenant
which
that protects an the employer's reasonable
competitive
business interests and expressly prohibits an employee from
engaging in employment or a line of business after termination of
employment
if the agreement or covenant is reasonable as to its
duration, geographical area, and the type of employment or line of
business.
To
(2) An employer shall not obtain a noncompete agreement from
an employee or applicant for employment unless the employer has
done all of the following:
(a) Provided applicants for the position with written notice
of the requirement for a noncompete agreement.
(b) Disclosed the terms of the noncompete agreement in writing
before hiring the employee.
(c) Posted this act or a summary of its requirements in a
conspicuous place at the worksite where it is accessible to
employees.
(3) An employer shall not request or obtain a noncompete
agreement from an employee or applicant for employment who is, or
would be hired as, a low-wage employee. As used in this section,
"low-wage employee" means an employee who receives compensation
from the employer, excluding overtime compensation, at a rate less
than the greater of any of the following:
(a) $15.00 per hour.
(b) 150% of the minimum hourly wage established under section
4 of the workforce opportunity wage act, 2014 PA 138, MCL 408.414.
(c) Annual compensation of $31,200.00, adjusted for inflation
annually by the state treasurer based on the most comprehensive
index of consumer prices available for the Detroit area from the
United States Department of Labor, Bureau of Labor Statistics and
rounded to the nearest multiple of $0.05.
(4) All of the following are void and unenforceable:
(a) A noncompete agreement obtained in violation of subsection
(2) or (3).
(b) A term in an agreement that purports to waive requirements
of this section.
(c) A choice of law provision in a contract, to the extent
that it would negate the requirements of this section.
(5) The attorney general may bring an action to enforce
subsection (3) in a court of competent jurisdiction. An employer
who violates subsection (3) is responsible for a civil violation
and shall be fined not more than $5,000.00 for each employee who is
a subject of the violation. The fine proceeds shall be deposited in
the state treasury.
(6) In an action to enforce or to void or limit enforcement of
a noncompete agreement, the employer bears the burden of
establishing that the employee was not a low-wage employee and that
the duration, geographical area, and type of employment or line of
business are reasonable. The court may void an unreasonable
agreement,
or to the extent any such a noncompete agreement or
covenant
is found to be 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. If the court voids or limits the noncompete
agreement, the court shall award both of the following:
(a) To the employee and any other injured party, the actual
costs of the action that were necessary to defend against
enforcement of the noncompete agreement or to void or limit the
agreement, including, but not limited to, reasonable attorney fees.
(b) To the employee, all income lost as a result of actual or
threatened enforcement of the void noncompete agreement or the
unreasonable terms of the noncompete agreement.
(7) (2)
This section shall apply applies to
covenants and
agreements
which are entered into after March 29, 1985. This
section, as amended by the 2016 act that amended this section,
applies to noncompete agreements entered into after the effective
date of that act.
Enacting section 1. This amendatory act takes effect 90 days
after the date it is enacted into law.