Wisconsin: Employee Non-Solicitation Agreements Must Be “Reasonable”

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January 19, 2018

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In Wisconsin, post-employment restrictive covenants must be “reasonable” to be enforced. In Manitowoc Company, Inc. v. Lanning, the Wisconsin Supreme Court recently stated that post-employment non-solicitation agreements must meet the same standard as other post-employment restrictive covenants (e.g., non-competition and non-disclosure agreements). Specifically, a “reasonable” non-solicitation agreement must be necessary for the protection of the employer, provide reasonable time and territorial limits, and not be oppressive to the employee or contrary to public policy.

In Manitowoc, a former engineer signed a non-solicitation agreement as part of his employment contract.  When he left the company, he allegedly solicited a number of Manitowoc employees to join him in working for a competitor. The non-solicitation agreement barred him from soliciting any of the 13,000 worldwide Manitowoc employees to join him. The court stated that because Manitowoc’s non-solicitation provisions attempted to cover every Manitowoc employee—including low-level employees that the engineer did not know—the provision was overbroad and not necessary for Manitowoc’s protection.

Action Items

  1. Consult legal counsel to review post-employment restrictive covenants, including non-solicitation agreements, for compliance with this ruling.

Disclaimer: This document is designed to provide general information and guidance concerning employment-related issues. It is presented with the understanding that ManagEase is not engaged in rendering any legal opinions. If a legal opinion is needed, please contact the services of your own legal adviser.

© 2018 ManagEase

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