In Wisconsin, there are some protections that employers have over their information and ability to do business. One of these protections is known as a non-compete agreement. Essentially, a non-compete agreement prevents an employee, once they leave a company, from working for a direct competitor and divulge trade secrets to a new employer that may hinder the business practices of their previous employer.
Often, there is a limit to the amount of time that may pass between the time an employee stops working at one employer and when they are free to work at another competing employer. This period in between employment helps protect any emerging trade secrets that would be detrimental to the initial company if passed on to another.
Are Non-Competes Only for Certain Employees?
Often, companies choose to place all staff on a non-compete when they are hired – or may enforce one at the time of creating a proprietary product or service. The company may consider everyone employed to be potentially at risk to provide information to a competitor in this scenario.
There are other times when only high-level employees with access to trade secrets and additional information may be placed under a non-compete as part of their employment contract. This allows the rest of the staff unaware of the data considered at-risk to find employment at a competitor or elsewhere freely.
The time someone is at the company may also factor into whether a non-compete is enforceable or even necessary. In Wisconsin, there is precedent for the state to find a non-compete agreement to be unenforceable because the employee wasn’t at the given company long enough.
Factors that come into play when it comes to the type of employee and enforceability of a non-compete include:
- Size of the company
- Percentage of employees under the non-compete
- Type of business
- Terms of the non-compete
- Special circumstances allowed by the non-compete
How Enforceable is a Non-Compete Agreement in Wisconsin?
There are typically five factors that the state of Wisconsin will look at when determining if a non-compete agreement is enforceable. They include:
- How necessary the non-compete agreement is to protect the employer
- How reasonable the time restriction for new employment is
- How reasonable the geographic restriction for new employment is
- How broad the contract is – too broad may be grounds for non-enforcement
- If the contract violates public policy
In general, the points being made by the Wisconsin courts want to assure that the business issuing the non-compete is being reasonable with what was laid out for the employee to sign and reasonable with how it is enforcing the non-compete. The courts also look for some form of consideration in the contract. In other words, is there some kind of benefit to the employee that they can receive in exchange for signing the agreement? And will the employer take reasonable steps not to punish the employee if they have made an effort to comply with the agreement post-employment?
Non-Compete Lawyer in Milwaukee
If you have questions about non-compete agreements as an employer or need help enforcing the non-compete, get in touch with the professionals at Kerkman & Dunn. The team has a rich history dealing with non-compete law in Wisconsin.
