The Wisconsin Court of Appeals has affirmed a circuit court victory by Attorneys and Lester Pines on behalf of an executive and his newly formed company. The decision prevented the executive’s former employer from enforcing an overly broad set of restrictive covenants.
The Court of Appeals held that the restrictive covenants at issue were not enforceable under Wis. Stat. § 103.465, which prohibits overly broad covenants not to compete as restraints of trade. The employer attempted to rely on Selmer v. Rinn, 2010 WI App 106, which held that § 103.465 does not apply when a covenant is not a condition of employment and the employer does not possess an unfair bargaining advantage over the employee. The Court of Appeals upheld the circuit court’s finding that, despite the fact that the covenant was tied to an option to purchase stock, it was a condition of employment. The Court went on to hold that the covenants were overly broad and, therefore, that the restrictive covenants were unenforceable under Wis. Stat. § 103.465.
The decision, by providing persuasive authority for future cases across Wisconsin, will help employees and their future business prospects to fight oppressive non-competition agreement and other restrictive covenants.