What WI employers need to know: Wisconsin employers must immediately revise their non-compete agreements so as to comply with this recent decision.
The Wisconsin Supreme Court has ruled that an employee non-solicitation agreement is unenforceable if it unreasonably restricts the employee’s ability to “freely compete for the best talent in the labor pool”. This opinion (The Manitowoc Company v. Lanning, 2018 WI 6) is a significant decision that may affect the enforceability of existing non-solicitation agreements that are not tailored to an employee’s particular situation.
It is common for employers to require employees to enter into non-solicitation agreements as part of or companion to non-compete agreements. Non-solicitation agreements prohibit employees who leave the employer from encouraging the employer’s other employees to switch jobs or to otherwise leave the employer. These agreements typically arise in two situations: (1) when the employee is hired, and the non-compete and non-solicitation agreements form part of the consideration given in exchange for being hired, and (2) when employment is terminated, and the non-compete and non-solicitation agreements form part of the consideration given in exchange for some kind of termination benefit.
In the Manitowoc Company case, the non-solicitation agreement at issue prohibited the employee, Lanning, from soliciting, inducing, or encouraging any Manitowoc Company employee...
