Abstract
The Federal Trade Commission (FTC) voted on September 5, 2025, to accept a federal court ruling that it had exceeded its authority in proposing a ban on covenants not to compete (CNTCs), ending two-and-a-half years of speculation. Consequently, the enforceability of CNTCs will primarily be determined by Michigan statutory and common law. Guidelines for drafting enforceable CNTCs include setting a reasonable term, typically two years or less for employees, though purchase agreements may allow up to five years. The restricted geographic territory must be limited to what is necessary to protect the practice’s current patient population, such as a 10-mile radius if relevant. Liquidated damages provisions must bear a reasonable relationship to the employer’s actual lost profits to be enforceable. Courts retain broad equitable discretion and may refuse to enforce an otherwise valid CNTC if the employer has breached the underlying employment agreement.
Recommended Citation
Schulte, Daniel JD
(2025)
"Dentistry and the Law: There Will Be No Ban on Covenants Not to Compete,"
The Journal of the Michigan Dental Association: Vol. 107:
No.
11, Article 6.
Available at:
https://commons.ada.org/journalmichigandentalassociation/vol107/iss11/6
Submit Article
