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Wisconsin Supreme Court Rules Continued Employment is Lawful Consideration to Support a Restrictive Covenant

Wisconsin has firmly joined the majority of jurisdictions in the United States that hold that continued employment constitutes lawful consideration sufficient to enforce a restrictive covenant with a current at-will employee. The Wisconsin Supreme Court's decision in Runzheimer International, Ltd. v. Friedlen and Corporate Reimbursement Services, Inc., 2015 WI 45 (Wis. 2015), is a victory for Wisconsin employers and marks the end of years of debate on this issue.

Wisconsin Non-Compete Waters Just Got Muddier

On April 30, 2015, the Wisconsin Supreme Court issued its long-awaited decision in Runzheimer Int’l, Ltd. v. Friedlen, settling a dispute in Wisconsin over whether continued employment alone was sufficient to bind an employee to a non-compete agreement. The case involved an important, if nuanced, distinction between (a) whether there is a legal “agreement” in the first place and (b) whether that legal agreement is enforceable. If there is no legal agreement, then there is nothing to enforce. If there is a legal agreement, the question becomes whether the restrictions themselves are enforceable (based on their reasonableness, etc.). The former question was addressed in Runzheimer.

Wisconsin Supreme Court Holds That Continued Employment Constitutes Adequate Consideration for Restrictive Covenants

The Wisconsin Supreme Court recently issued a decision holding that continued employment is adequate consideration for restrictive covenants. In Runzheimer International, Ltd. v. Friedlen, et al., No. 2013AP1392 (April 30, 2015), the state’s highest court held that an employer’s forbearance of its right to terminate an at-will employment relationship can support a restrictive covenant.

Proposed Wisconsin Legislation Would Make It Easier for Employers to Enforce Restrictive Covenants

The Wisconsin legislature may soon dramatically change the law that governs restrictive covenants, making them easier to enforce.

Unions Sue to Stop Wisconsin’s New Right-to-Work Law

The day after Wisconsin Governor Scott Walker (R) signed the state’s new right-to-work act, unions struck back with a complaint and a motion for a restraining order and temporary injunction. Three unions in Wisconsin, the International Association of Machinists and Aerospace Workers (“IAM”) District 10 and Local 1061, the United Steelworkers (“USW”), and the AFL-CIO, banded together against the State of Wisconsin, Governor Walker, and a handful of Wisconsin state agency officials to seek injunctive relief in Dane County Circuit Court.

Wisconsin Becomes 25th Right-to-Work State

The Wisconsin State Assembly has voted to make Wisconsin the 25th right-to-work state in the country.

Wisconsin Becomes Next "Right to Work" State

On March 6, 2015, Wisconsin’s State Assembly approved legislation that will make Wisconsin the 25th “Right to Work” state in the country. Governor Walker has said he intends to sign 2015 Assembly Bill 61 into law within days. The legislation significantly modifies Chapter 111 of the Wisconsin Statutes by, among other things, prohibiting employers and labor organizations from requiring employees to join, remain a member of, or financially support a labor organization as a condition of employment. Violation of the law will be a Class A misdemeanor. A brief summary of the key points follows.

Wisconsin is Really Open for Business: Governor Signs New Right-to-Work Law

Wisconsin Governor Scott Walker’s motto is that Wisconsin is “open for business,” and he means it. On March 9, 2015, Governor Walker signed into law Senate Bill 44, which made Wisconsin the 25th right-to-work state in the country. With the surrounding Great Lakes states of Michigan and Indiana already enacting right to work laws (and Iowa already being a right-to-work state), the momentum in Wisconsin was to follow so it would not be at a competitive disadvantage in retaining and attracting new businesses and job growth.

Independent Contractor . . . or Not? DOL and Wisconsin DWD Team Up to Reduce Employee Misclassification

On January 20, 2015, the U.S. Department of Labor (DOL) announced that Wisconsin had become the latest state to join the “Misclassification Initiative,” which is designed to protect the rights of employees “by preventing their misclassification as independent contractors or other nonemployee statuses.” Wisconsin is the 19th state to sign a Memorandum of Understanding (MOU) with the DOL for the purpose of sharing information and coordinating enforcement regarding employee classification. The MOU between the DOL’s Wage and Hour Division and Wisconsin’s Department of Workforce Development has an initial term of three years.

Employer Violated Wisconsin FMLA When it Terminated Unauthorized Worker who Took Medical Leave

A Wisconsin court of appeals was not swayed by a recent argument that an employer did not violate the Wisconsin FMLA when the employer terminated an employee returning from medical leave for lacking work authorization. In Burlington Graphic Systems, Inc. v. Department of Workforce Development, Appeal No. 2014AP762, an undocumented employee, Karen Alvarez, of Burlington Graphic Systems took one week of leave after surgery. When Alvarez returned to work, the company terminated her employment for unexcused absences. The employee then filed a complaint against the company with the Wisconsin Department of Workforce Development. The Department found probable cause that the Wisconsin FMLA had been violated and set a hearing before an administrative law judge (ALJ). The company rehired the employee prior to the hearing, and required her to complete a Form I-9 as a new hire. Alvarez could not produce documents proving she was authorized to work so Burlington, as a result the company terminated her employment.