Federal & State Regulations | Non-compete agreements - Wisconsin

State Info

Summary of differences between federal and state regulations

The state of Wisconsin has a significant body of law which addresses non-compete agreements. State courts have decided that to be enforceable restrictive covenants must:

be necessary for the protection of the employer;
provide a reasonable time period;
cover a reasonable territory;
not be unreasonable to the employee;
not be unreasonable to the general public.

If the court concludes that the restrictions are unreasonable, the non-compete agreement is unenforceable. The court will not reform or enforce it for a reasonable period and in a reasonable geographic area.

Whether or not a non-compete agreement is a legal and binding contract depends on the scope of the restrictions the agreement includes, precedents set in court decisions, and a variety of other factors.

Typically courts do not want to deprive employees of earning a living in their chosen fields, but they also want to protect companies. So, a non-compete agreement might be enforceable, but only if it is reasonable in scope and necessary to protect the company's interests.

In January 2018, the Wisconsin Supreme Court ruled that non-solicitation agreement are not enforceable if they unreasonably restrict another employer’s ability to “freely compete for the best talent in the labor pool.” In this case, an employee’s nonsolicitation agreement prohibited him from convincing anyone else employed by the company to quit and join him at a competing company. The court also ruled that the provision was not “reasonably necessary for the protection of the employer.” The Manitowoc Company v. Lanning, 2018