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What You Need to Know About Non-Compete Contracts in Wisconsin

 Posted on February 10, 2022 in Employment Law

b2ap3_thumbnail_JAKheadshot.jpgBy: Attorney Jaclyn Kallie

Being asked to sign a non-compete contract when you start a job may seem like standard procedure, or it could be a big risk for you, depending on your location and what line of work you are in. Non-competes may include any number of restrictions related to what type of work you can do, where, and when. While generally enforceable, in some cases these agreements may not be enforceable in whole or in part. If you feel that your non-compete clause is truly hindering your career progress and opportunities, it may be worth consulting an attorney for an evaluation. The agreement you signed may not be as ironclad as you may think. 

When is a Non-Compete Clause Unenforceable in Wisconsin?

In determining whether non-compete clauses are enforceable, Wisconsin law attempts to balance the freedom to move within the labor market with the protections companies seek to obtain with these agreements.  If every company was allowed to require every employee to sign a non-compete as a condition of employment, it would be quite difficult for the labor market to function.  Changing jobs could become quite difficult if this were the case.  Therefore, to be enforceable the terms of a non-compete clause must be reasonable and allow an employee to obtain employment, albeit with restrictions.  A few things you should know about non-compete clauses include: 

  • Ordinary competition - Employers cannot use non-compete clauses to prevent the type of normal competition that anyone could engage in.  There has to be some type of special circumstance such that having worked for this employer, you would have an unfair edge in competing against it. 

  • Disfavor - In very broad terms, non-compete clauses lean toward disfavor and are interpreted in favor of the employee. Courts are generally inclined to protect the right of the employee to freely market his or her skills or services. 

  • Scope - A non-compete cannot be too broad.  Limitations related to time, geography, and the type of work must be reasonable.  An employer may have a valid reason to prevent a former employee from opening a similar business in the next town over, but probably not in the next state over if they do not conduct business in that state, for example. 

  • Undue burden - Even when the non-compete agreement is largely geared towards protecting the employer’s legitimate interests, courts may decline to enforce the clause if it causes undue hardship to the employee. If the terms of the non-compete are making it impossible for you to keep working in your profession without significant obstacles, it may be dismissed. 

If you find yourself in this situation, make sure to speak to an attorney before taking any action that would violate the terms of the non-compete, including accepting a potentially competitive position elsewhere.  You can also ask a lawyer to review a non-compete before signing.

Call a Milwaukee Employment Contracts Attorney

For concerns over a non-compete clause, Gimbel, Reilly, Guerin & Brown, LLP, LLP is here to help. Our experienced Milwaukee employment contracts lawyers will carefully review the terms of your non-compete to ensure that you can make the most of your skills and knowledge. Call (414) 271-1440 for a free consultation. 





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