In Wisconsin, post-employment restrictive covenants are governed by Wis. Stat. § 103.465, requiring that any restrictive covenant be reasonable to be enforceable.1
Articles About Wisconsin Labor And Employment Law.
The Wisconsin Court of Appeals recently reaffirmed long-standing precedent holding that employment-at-will agreements may not be modified by a policy or procedure unless it contains an express provision demonstrating that the parties intended to be bound by something other than the established at-will relationship.
A bill recently proposed in Wisconsin could seriously change litigation strategy and settlement considerations for many employment claims filed with state agencies. Assembly Bill 64 would amend the Wisconsin Fair Employment Act (“WFEA”), the Wisconsin Family and Medical Leave Act (“WFMLA”), and the relatively new Organ and Bone Marrow Donation Law (“OBMDL”) by empowering both the complainant and an employer to make a statutory offer of settlement. Failing to accept such a settlement offer could result in significant financial consequences.
There are so many stories about restrictive covenants being unenforceable in Wisconsin that it is refreshing to see a case where a restrictive covenant is enforced – especially at the preliminary injunction stage.
Analyzing an anti-poaching agreement as a non-compete agreement, a Wisconsin Court of Appeals has confirmed that a former employee’s agreement not to solicit other employees may be void and unenforceable if it is too broad. The Manitowoc Company v. Lanning, No. 2015AP1530 (Wis. Ct. App. Aug. 17, 2016). The decision offers an analysis for determining when an anti-poaching agreement goes beyond protecting the employer’s legitimate interests and becomes an unreasonable restraint of trade.
A new Wisconsin law has repealed the state’s prohibition (which has existed for more than 50 years) on manufacturing, selling, transporting, purchasing, or possessing a switchblade and which subjected violators to $10,000 in fines and nine months in jail.
The Wisconsin Supreme Court recently helped clarify the circumstances under which pre- and post-shift donning and doffing constitutes compensable work under Wisconsin’s minimum wage and overtime laws.1 The decision, which involved production workers at a plant owned by Hormel Foods Corporation (“Hormel” or “the company”), also appears to narrow the applicability of the federal de minimis rule under state law.
Effective July 14, 2015, Wisconsin has made it easier for an employer to comply with Wisconsin Statute 103.85, Wisconsin’s “one day of rest in seven” requirement. Under this statute, most factory and mercantile employers must provide their employees with at least 24 consecutive hours of rest for every 7 consecutive days worked. These restrictions do not apply to certain categories of workers, including janitors; security personnel; those employed in the manufacture of butter, cheese or other dairy products, or in the distribution of milk or cream; those who work in canneries or freezers; individuals who are employed in bakeries, flour and feed mills, hotels or restaurants; employees whose duties include no work on Sunday other than caring for live animals or maintaining fires; and workers whose labor is required by an emergency situation that could not reasonably have been anticipated.
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.
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.
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.
The Wisconsin State Assembly has voted to make Wisconsin the 25th right-to-work state in the country.
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.
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.
The Wisconsin Court of Appeals has asked the Wisconsin Supreme Court for “guidance” as to whether additional consideration is required to support a covenant not to compete entered into during an at-will employment relationship. The case, Runzheimer International, LTD v. Friedlen, involves an action by Runzheimer International, Ltd to enforce a non-compete agreement signed by David Friedlen in 2009, after Friedlen had been working at Runzheimer as an at-will employee for nearly 20 years. Signing the agreement was made a condition of Friedlen’s continued employment and his participation in the company’s yearly incentive plan. The agreement did not increase Friedlen’s salary, nor did it make him eligible for incentives that he had not been eligible for prior to signing the agreement. The trial court found that the non-compete was invalid because it lacked sufficient consideration. Runzheimer appealed, arguing that there should be no difference in how courts treat restrictive covenants entered into at the start of employment and those entered into after years of employment, because “every day is a new day both for employer and employee in an at-will relationship.”