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Vol. II, Issue No. 4
June 21, 2013
Are your employment agreements sufficiently one-sided?  This month's briefing suggests that that employers can make them even more one-sided.  We also cover an interesting business issue arising out of a divorce proceeding as well as the Mackinac Policy Conference.  Thanks for allowing us to send our newsletter to you.  Enjoy the summer! 


Can Your Employment Agreement Be Heavily One-Sided? A Federal Court Says "Yes."
Employment agreements are often one-sided in favor of the employer as the employee typically has little bargaining power. A federal court in Michigan highlighted how favorable those terms may be to an employer in the case of Stardock Systems vs. Miseta.  The employee in that case entered into an arbitration agreement as a condition of employment. The agreement provided that she was required to bring any claims against the employer within six months of her termination and only in arbitration.  After more than six months from her termination date, the employer filed an action against the employee in federal court. The employee argued that the action was untimely and in any event should have been brought in arbitration.  The court found that the six-month arbitration clause only applied to the employee and not to any claims which the employer may have against her.  As was the case here, a well drafted employment agreement can be very valuable to a business owner.
Non-Compete Agreement Entered As Part of a Divorce Judgment Is Valid
Where a trial court in a divorce proceeding determines that an equitable property distribution necessarily requires a non-compete agreement against one spouse, that finding will be upheld.  In Loutts v. Louttsthe spouses were each 50% owners in a business which they both operated.  They each sought the other's 50% business interest at trial and also sought a non-compete from the other spouse.  The court awarded the business to the husband and entered an order prohibiting the wife from competing with the business or contacting the customers of the business.  The Michigan Court of Appeals upheld the non-competition and non-solicitation provision since the goal of property distribution is equity and both parties sought the same provision from the other spouse.  The clear lesson:  "be careful what you ask for; the other side may get it."
Optimism Abounds at Mackinac Policy Conference 
Mark Snitchler and Eric Parzianello attended the 2013 Mackinac Policy Conference last month. Michigan Governor Rick Snyder and local business leaders all expressed optimism in the direction of the state's economy as well as the development of downtown Detroit. There have been great positive changes even in the few months since our move downtown.  We're happy to be part of it and to have participated in the Mackinac Conference.

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