Major Changes Proposed to Wisconsin’s Law Governing Non-Compete Agreements:
Two new Bills have just been introduced in the Wisconsin legislature that, if passed, will dramatically change the landscape of Wisconsin law governing covenants not to compete. Since the enactment of Wis. Stat. sec. 103.465, Wisconsin has had one of the toughest laws in the country, voiding and nullifying in its entirety any covenant not to compete that was too broad in scope, even to the extent it may have otherwise been reasonable and enforceable.
Currently in committees, 2015 Senate Bill 69 and 2015 Assembly Bill 91 would repeal 103.465 and literally do a 180 degree turn in Wisconsin’s current law, whichdisfavors non-competes and subjects them to strict scrutiny. With the passage of the new section 103.465, covenants not to compete would be much easier for employers to enforce, and courts would be required to interpret non-competes in favor of providing reasonable protection to an employer’s legitimate business interests. The revised law would also give the courts the authority to award costs and attorneys’ fees to the prevailing party in litigation.
Because of the dramatic change the proposed legislation would have on Wisconsin’s businesses, and the likelihood that these Bills will pass the Republican controlled legislature in some form, we are providing our clients with the attached Q&A, which explains some of the details of the new law, although the final version, if enacted, may be slightly different. If the proposed legislation goes into effect, we urge you to (1) consider utilizing non-compete agreements even if you have not done so in the past, or (2) consider extending, modifying or renewing your current non-compete agreement on or after the effective date of the new law, as any such extension, modification or renewal would be governed under the new statute, and would be significantly easier to enforce than your old agreements.
If you have any questions or want additional information reading the proposed changes in Wisconsin’s non-compete law, please do not hesitate to contact any member of our firm, and we will be happy to assist you.
Christopher J. Murray, Esq., presented “Chapter 109 – What Does Super Priority Mean?” on May 1st which discussed wage liens under Chapter 109 of the Wisconsin Statutes, with specific application to Chapter 128 receiverships.
Michael Polsky, Esq. and Christopher J. Murray, Esq. are contributors to STRATEGIC ALTERNATIVES FOR AND AGAINST DISTRESSED BUSINESSES, 2015 edition.
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