Milwaukee Post Employment Competition Lawyer
What right does your Wisconsin employer have to dictate how you make a living after you leave a particular job? Your boss may lead you to believe that signing a covenant not to compete is a reasonable, standard procedure. And that you are bound to its provisions no matter what. Did you even know about the document before you were hired?
Trouble related to restrictive covenants does not have to be inevitable. Learn what your rights are and how to protect yourself from unreasonable expectations by contacting Wisconsin employment lawyers at the law offices of Alan C. Olson & Associates, s.c.
The terms restrictive covenant or covenant not to compete are used interchangeably to mean: a provision in a written employment agreement restricting the employee from engaging in specified business activities, usually within a specific territory and for a specified period of time after the employment ends.
In 1957 the Wisconsin legislature enacted a statute which makes restrictive covenants lawful and enforceable only if the restrictions imposed are reasonably necessary for the protection of the employer. The statute prohibits the court from rewriting the terms of a non-compete to make it enforceable, or the elimination of unreasonable provisions so as to validate the remaining covenant.
Wisconsin courts have consistently applied a five-part test to determine enforceability:
- Was the covenant necessary to protect the employer?
- Was the time period of the restriction reasonable?
- Was the territory of the restriction reasonable?
- Was the restriction reasonable to the employee?
- Was the restriction reasonable to the general public?
A restrictive covenant may only bind an ex-employee for a reasonable period of time after he or she has left the employment. Under Wisconsin law, a two-year restriction will generally pass muster, provided that all other terms of the restriction are reasonable, and the employer can establish a need for such a restriction. Reasonableness in this respect depends upon the period of time it will take to obliterate the minds of the employer’s customers the identification formed during the ex-employee’s employment.
The court will consider additional factors in determining the enforceability of a covenant not to compete, including:
- Access to Confidential Information or Trade Secrets
- Territorial and Activity Restriction
- Customer Contacts
- Reasonableness as to Employee
With post-employment examination of a covenant not to compete, an employer’s protected interests are weighed against the interests of the employee to earn a living. At least one court found that when enforcement of a restrictive covenant would have the effect of prohibiting the employee from utilizing his or her skills in any other employment, the employer’s interests could be adequately protected by requiring only confidentiality of trade secrets in the employee’s new job.
If you have been asked to sign a restrictive covenant or are facing termination of your employment and have already signed a non-compete agreement, please contact us for advice and assistance.