For some reason or another, we’ve experienced a significant up-tick in the number of times this question is coming up, so we wanted to take a moment to answer it with a stereotypical attorney response: “Yes, but not always.”
Currently (more on this in a bit), in order for a non-compete agreement to be enforceable in Wisconsin, it must:
- Be necessary for the protection of the employer;
- Have a reasonable time restriction;
- Have a reasonable territorial limit (distance from the employer or geographical area);
- Not be harsh or oppressive to the employee (i.e., be too overbroad); and
- Not contradict public policy (e.g., eliminating the only certified cat surgeon in a 50-mile radius from being a cat surgeon within a 50-mile radius)
Further, “consideration” (some sort of benefit) must be provided to the employee in exchange for signing the agreement. Notably, the Wisconsin Supreme Court held this year that continued employment can be sufficient consideration for a non-compete agreement. This of course means that in order for an employer to make continued employment the consideration for signing such an agreement, it must be prepared to terminate the individual in the event s/he does not sign it, but I digress.
So, assuming that the non-compete agreement is necessary to protect the employer, contains reasonable time and geographic restrictions, is not overly oppressive to the employee, and does not contradict public policy, the agreement will be enforceable in Wisconsin. If not, then it will not be enforceable.
However, to circle back on the “Currently” while also reinforcing the importance of keeping up to date with the constant changes in employment law, this all may soon be changing. This year legislation was introduced that would significantly alter the non-compete landscape and make them significantly easier to enforce. For more information on this potential change, click here and scroll to the section of the blog titled “2015 Senate Bill 69 – Restrictive Covenant Reform.” If these changes do go through, be sure that we will cover them here.
Of course, for further guidance on properly drafting a non-compete agreement for your workplace of having your current agreement reviewed for enforceability, please contact any of the fine attorneys at Walcheske & Luzi.