Updating a previous Non-Compete Agreement Law post, on January 19, 2018, the Wisconsin Supreme Court issued a decision in Manitowoc Company v. Lanning affirming the Court of Appeals’ decision that Wisconsin’s non-compete statute, §103.465, Wis. Stats, applies to employment contracts which prohibit an employee from soliciting other employees to terminate their employment relationship with the employer. Although not labeled as a non-compete agreement, the Court held that the Non-Solicitation of employees agreement did restrict competition, stating, “The provision restricts one form of competition with Manitowoc Company. It restricts Lanning (and any employee of Manitowoc Company) from freely competing against Manitowoc Company in the labor market by insulating any Manitowoc Company employee from Lanning’s solicitations.”
The Court also affirmed the Court of Appeals’ decision that the specific non-solicitation agreement at issue in the case was an unreasonable restraint on trade in violation of Wisconsin’s non-compete statute. The Court reasoned that the provision was unreasonable because, “The plain language of Lanning’s non-solicitation of employees provision creates a sweeping prohibition that prevents Lanning from encouraging any Manitowoc Company employee, no matter the employee’s job or location, to terminate his or her employment with Manitowoc Company for any reason, or soliciting any Manitowoc Company employee to take any position with any competitor, supplier, or customer of Manitowoc Company.”
In Wisconsin, Non-Compete Agreements must meet five prerequisites in order to be enforceable. They must:
(1) be necessary for the protection of the employer, that is, the employer must have a protectable interest justifying the restriction imposed on the activity of the employee;
(2) provide a reasonable time limit;
(3) provide a reasonable territorial limit;
(4) not be harsh or oppressive as to the employee; and
(5) not be contrary to public policy.
Carroll Law Firm is a Milwaukee Employment Law Firm that zealously represents employees, professionals and executives in a myriad of employment law matters including challenging non-compete agreements, severance negotiation, employment discrimination (sex discrimination, age discrimination, disability discrimination, race discrimination) sexual harassment and retaliation.