State Supreme Court Rules Restrictive Covenant Addressing Non-Solicitation Overreaches
A split Wisconsin Supreme Court took up the prescient issue of whether a non-solicitation agreement is a restraint of trade governed by the state statute on restrictive covenants. An employer alleged a former employee violated his employment agreement executed in the last two years of employment that prohibited him from soliciting or encouraging any other employees to terminate their employment with the company or consider retirement. It further prohibited the employee from providing a job reference for any employee or accepting work with any of its competitors. Despite an early win for the employer in the trial court, the highest court in the state sided with the employee. It found the non-solicitation agreement was indeed a restraint of trade and the employer did not have a protectable interest justifying the agreement. Having fallen short on the statutory standards for valid non-competes, the agreement was unenforceable in its entirety, even the parts that would be considered a reasonable restraint.