Non-compete agreements offer protection to employers after the separation of an employer and employee. This protection is limited, as courts strictly construe the terms of non-compete agreements. In Michigan, non-compete agreements must not be overly broad. To be enforceable, a non-compete agreement must be reasonable in limiting the time a former employee may not compete with the employer. It must also provide a reasonably limited geographic area in which the former employee may not compete. Finally, the type of business activity limited by the non-compete must be reasonable.
A modern variation of a non-compete dispute is currently being litigated in federal court in Minnesota. In TEKsystems, Inc. v. Hammernick et al., No 0:10-cv-00819, the plaintiff (an employer) sought to enforce a non-compete agreement with defendants (its former employees). The plaintiff alleged that the defendants impermissibly used social-networking websites to solicit contacts. One defendant allegedly “connected” with, and communicated with, certain contract employees on the popular social networking website LinkedIn.
Although the outcome of this pending case is uncertain, employers should consider whether to specifically discuss the use of social media in non-compete agreements. This is an issue which is likely to be the subject of future litigation. We will monitor the TEKsystems case and let you know the results.
This article was written by Matthew Ehrlich, Legal Clerk at Demorest Law Firm.
