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Noncompete Case Certified to Wisconsin Supreme Court on Issue of Consideration

Posted: May 13, 2014 | Jackson Lewis Category: Wisconsin - Restrictive Covenants

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.”

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