Can I take a new job when I leave my current employer in Wisconsin?
Can I take a new job when I leave my current employer in Wisconsin?
Generally, an employee would be allowed to take any type of employment with another company once he or she leaves employment, but many companies are now having employees sign non-compete agreements which would limit an employee’s ability to take a different job.
Court Policy
Wisconsin law states that restrictive covenants employment contracts are only valid within a specified territory and for a specified time. Also, the restrictions imposed must be reasonably necessary for the protection of the prior employer. Wisconsin courts view these employees’ non-competes very strictly. Their policy is that employees should have the freedom to work for who they wish except if limited by an employer’s reasonable non-compete agreement.
Territory Restriction
The first thing to review in a non-compete agreement is whether or not there is a reasonable territory restriction. This would mean that the area where an ex-employee would have restrictions placed on them would have to generally be within an area where the company and more specifically the employee actually worked for the company. Overbroad restrictions such as, not allowing somebody work within the entire United States, when the company only did business within the State of Wisconsin would not be upheld.
Non-Solicitation
Many non-competes also contain restrictions upon soliciting the prior company’s customers. The courts will approve such restrictions provided that a non-solicitation provision would generally have to relate to customers for whom the employee actually had business dealings with.
Time Restrictions
Non-competes are also subject to a reasonable period of time. In Wisconsin, courts have upheld non-competes for generally no more than two years from the time that a party leaves the employment with their original employer. If an employee only works for a company for a very brief time period, the employer may want to limit the length of time that the ex-employee is restricted to the actual time that the employee worked for the company. As an example, if the employee only works for 30 days for the employer, a court may not allow an employer to restrict that employee from seeking other employment in competition with the first employer for a two-year period. The courts may want to limit that to even a shorter period of time.
In Wisconsin, an employer must carefully draft these non-compete agreements, as Wisconsin courts are not allowed to make changes to the non-compete agreement in order to make them legal.
Consideration
Lastly, as a general rule an employee needs to receive some type of consideration in order to make the non-compete enforceable. Consideration can include being hired for a new job or receiving some type of monetary compensation or a promotion. The courts have recently now allowed the employer to enforce these agreements if the employer has a policy that requires employees to sign non-competes as a condition for continued employment.
Employee non-compete is an ever-ongoing changing area of the law and you should, either as an employer or employee, seek legal counsel to interpret the validity of a non-compete agreement.