Are non-compete agreements enforceable in Wisconsin?
1. Baseline Rule. Wis. Stat. § 103.465 governs and is one of the strictest statutes in the country. A covenant "within specified territory and during a specified time is lawful and enforceable only if the restrictions imposed are reasonably necessary for the protection of the employer or principal."
2. Reasonableness Factors. Five-part test from Star Direct, Inc. v. Dal Pra, 2009 WI 76: the covenant must be (a) necessary to protect the employer's legitimate interest, (b) reasonable in duration, (c) reasonable in territory, (d) not harsh or oppressive to the employee, and (e) not contrary to public policy.
3. Consideration. Continued at-will employment is sufficient consideration in Wisconsin under Runzheimer International v. Friedlen, 2015 WI 45.
4. Wage Thresholds. None.
5. Blue Pencil / Reformation. § 103.465 is unique: "Any such restrictive covenant imposing an unreasonable restraint is illegal, void and unenforceable EVEN AS TO ANY PART OF THE COVENANT OR PERFORMANCE THAT WOULD BE A REASONABLE RESTRAINT." Wisconsin courts will NOT blue-pencil — an overbroad covenant is void in its entirety. This is a powerful employee protection.
6. Industry Carve-Outs. Lawyers barred by Wis. SCR 20:5.6. Physicians: enforceable but subject to public-interest scrutiny.
7. Indivisible Covenants. Star Direct held that if a covenant has multiple restrictions and any one is unreasonable, the entire covenant fails unless the restrictions are clearly divisible.
8. FTC Rule. Enjoined nationwide by Ryan LLC v. FTC (E.D. Tex. Aug. 2024); on appeal.
9. Garden Leave / Forfeiture-for-Competition. Permitted, though forfeiture clauses are also analyzed under § 103.465.
10. Choice of Law. Wisconsin courts apply Wisconsin law where another state's law conflicts with § 103.465's public policy.
This is legal information, not legal advice.
- Your covenant has any overbroad provision — the whole agreement may be void
- You are unsure whether your covenant's restrictions are 'divisible'
- Employer seeks an injunction in Wisconsin circuit court
- Wis. Stat. § 103.465
- Star Direct, Inc. v. Dal Pra, 2009 WI 76
- Runzheimer International v. Friedlen, 2015 WI 45
This is legal information, not legal advice. Laws vary by jurisdiction and change frequently. Always verify current law with official sources and consult a licensed attorney in your jurisdiction for advice on your specific situation.