Poorly Drafted Nonsolicitation Agreement Ruled Unenforceable
2005-03/21 Christopher M. Toner

A recent Wisconsin Court of Appeals decision involved the interpretation of a nonsolicitation clause contained in an employment agreement between an employer and four former employees.  In The Hayes Benefit Group of Wisconsin, LLC v. Palmer and Cay of Wisconsin, the District Court held that the nonsolicitation language contained in the agreement was overly broad and dismissed the employer’s claims.  In analyzing the crucial components of a valid restrictive covenant, the Court of Appeals found that nonsolicitation agreements, like non-compete agreements, must identify a territorial restriction, and reference a particular group of forbidden customers or clients in order to be valid.  If a nonsolicitation agreement fails to identify the clients and the geographic area in which the employee may not solicit, a Court will deem the agreement invalid.  

If you have questions or would like more information, please feel free to contact Christopher Toner, or your Ruder Ware attorney at 715.845.4336 .

© 2005 Ruder Ware, L.L.S.C. Accurate reproduction with acknowledgment granted. All rights reserved.
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