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A Business Court judge has decided to grant a request for enforcement of a non-compete provision in an asset purchase agreement.
The defendant, a stone mason, started as a laborer for Roossien Masonry and over time rose to claim the title of project foreman and minority owner. The defendant and the other owners of Roosien executed an asset purchase agreement (APA) under which the business was sold to the plaintiff. Under the terms of the APA, the defendant was required to execute a non-competition agreement (NCA). In 2025, however, the defendant resigned to take a job with Ophoff Companies, Inc. The plaintiff then sought a preliminary injunction to enforce the non-compete agreement.
“In this case, both sides cited MCL 445.774a as a guiding light. This statute of course provides the court with specific guidance in assessing the enforceability of a noncompete agreement. But by its terms, MCL 445.774a addresses only agreements between an employer and an employee. It says nothing of covenants made in connection with the sale of a business. … The question therefore presented is whether the NCA at issue here is a true employment agreement or is it something else. The answer to this threshold question is important because, in the context of contracts restraining trade, Michigan has historically recognized that employment contracts and contracts for the sale of business must be treated differently,” Judge Curt A. Benson wrote.
“A noncompete tied to the sale of a business is generally enforceable because it protects the buyer’s purchase of the business’s goodwill, that is, the expectation of continued customer relationships and patronage,” he added.
“The NCA is not an employment agreement but an agreement ancillary to the sale of the business and its assets,” Benson found.
“Although [the defendant] went on to work for the buyer, that employment does not convert the agreement into an employment-based restrictive covenant.,” the judge added.
“Taking all of this into account, the plaintiff is likely to prevail on the merits because the noncompetition agreement at issue is properly characterized as a covenant ancillary to the sale of a business and its goodwill, not as a mere employment restraint. … The evidence further demonstrates a clear breach of that agreement. … Finally, the surrounding circumstances reinforce the conclusion that enforcement of the NCA is both lawful and equitable,” Benson stated.
“[The defendant] must immediately cease his employment and involvement with Ophoff. [The defendant] is enjoined from accepting employment with ANY commercial masonry or restoration services company in the State of Michigan until December 30, 2027,” the judge concluded.
The 12-page decision is Integrated Exteriors, Inc. v. Obenchain; MiLW No. 10-110268.
