As in other states, the enforceability of restrictive covenants or non-compete clauses in the Sixth Circuit turns primarily on the reasonableness of the restriction’s geographic and temporal scope. Michigan has enacted a statute explaining when non-competes may be enforced. In Kentucky, Ohio and Tennessee, enforcement is determined entirely by common law. In Ohio and Tennessee, courts will consider the public interest in addition to the interests of the parties involved.

Law governing restrictive covenants
Restrictive covenants in employment agreements may be enforced if:

Common law

Cent. Adjustment Bureau, Inc. v. Ingram Assocs., Inc., 622 S.W.2d 681 (Ky. Ct. App. 1981)

  1. It is ancillary to or part of an otherwise enforceable agreement when the agreement is made.
  2. The terms of are reasonable in the light of the surrounding circumstances.
  3. The purpose is to prevent unfair competition by the employee or his subsequent employer.
  4. The restraint is no greater than reasonably necessary to protect the employer.

Common law

Murray v. Accounting Ctr. & Tax Servs., Inc., 898 N.E.2d 89 (Ohio App. 2008)

  1. It is ancillary to or part of an otherwise enforceable agreement when the agreement is made.
  2. The restraint is no greater than is required for the protection of the employer.
  3. The restraint does not impose undue hardship on the employee.
  4. It is not injurious to the public.
Michigan Mich. Comp. Laws § 445.774a
  1. It is reasonable as to its duration, geographical area, and the type of employment or line of business.
  2. It protects the employer’s reasonable competitive business interests.
Tennessee Murfreesboro Med. Clinic, P.A. v. Udom, 166 S.W.3d 674 (Tenn. 2005)
  1. There is a legitimate business interest to be protected.
  2. The time and territorial limitations are reasonable, considering:

(a) the consideration supporting the covenant;

(b) the threatened danger to the employer in the absence of the covenant;

(c) the economic hardship imposed on the employee by the covenant; and

(d) whether the covenant is inimical to the public interest.