Are agreements not to compete enforceable?
Although Wisconsin law disfavors “restrictive covenants” that limit what employees can do after leaving a company, they are enforceable if they are reasonable. They must be reasonably necessary to protect the employer’s interest, and reasonable as to time and territory or specific customers restricted, given that interest. Additionally, the agreements cannot be unduly harsh to the employee or unreasonably restrict their ability to make a living, and they cannot be unduly harmful to the public. These determinations are case by case, and what is “reasonable” for one industry or job may be unreasonable for another. Note that the entire covenant may be void if a portion of it is unreasonable.
In addition, while new employees can sign restrictive covenant as a condition of employment, employers must provide something, such as a bonus, promotion or a change in job responsibilities, to existing employees for signing a non-compete agreement. This need not be extravagant, but it must be something of value to the employee other than continued employment, that he or she would not have received otherwise.
Atty. Stacie H. Rosenzweig
Gutglass, Erickson, Bonville & Larson SC
735 N Water St # 1400
Milwaukee, WI 53202-4106
Phone: (414) 908-0242
Fax: (414) 273-3821
Email: stacie.rosenzweig@gebsc.com
