SB686: Bill Text

LRB-4578/2

GMM:jld:rs

2005 - 2006 LEGISLATURE

2005 Senate BILL 686

April 11, 2006 - Introduced by Senator Stepp, cosponsored by Representatives Krawczyk, Lehman, Loeffelholz and Pettis. Referred to Committee on Health, Children, Families, Aging and Long Term Care.

SB686,1,4 An Act to renumber and amend 103.465; and to create 103.465 (2) of the statutes; relating to: covenants by a physician not to compete with an employer or principal for more than one year after the termination of the employment or agency.

Analysis by the Legislative Reference Bureau

Under current law, a covenant by an assistant, servant, or agent not to compete with his or her employer or principal during the term of the employment or agency, or after the termination of the employment or agency, within a 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. Such a covenant that imposes an unreasonable restraint of trade, however, is illegal, void, and unenforceable even as to any part of the covenant that would be a reasonable restraint of trade.

This bill declares that a covenant by a physician not to compete with his or her employer or principal for more than one year after the termination of the employment or agency is per se an unreasonable restraint of trade and is illegal, void, and unenforceable even as to any part of the covenant that would be a reasonable restraint of trade. The bill does not affect: 1) a covenant not to compete that is in effect before the effective date of the bill until the covenant is extended, modified, or renewed; or 2) a covenant not to compete during or for one year or less after the termination of a physician's employment or agency, if the restrictions imposed are reasonable.

The people of the state of Wisconsin, represented in senate and assembly, do enact as follows:

SB686, s. 1 Section 1. 103.465 of the statutes is renumbered 103.465 (1) and amended to read:

SB686,2,11 103.465 (1) A Subject to sub. (2), a covenant by an assistant, servant, or agent not to compete with his or her employer or principal during the term of the employment or agency, or after the termination of that employment or agency, within a 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. Any covenant, not to compete described in this subsection, imposing that imposes an unreasonable restraint of trade is illegal, void, and unenforceable even as to any part of the covenant or performance that would be a reasonable restraint of trade.

SB686, s. 2 Section 2. 103.465 (2) of the statutes is created to read:

SB686,2,17 103.465 (2) A covenant by a physician not to compete with his or her employer or principal for more than one year after the termination of the employment or agency imposes an unreasonable restraint of trade and is illegal, void, and unenforceable even as to any part of the covenant or performance that would be a reasonable restraint of trade.

SB686, s. 3 Section 3. Initial applicability.

SB686,3,2 (1) Covenants by a physician not to compete after termination of employment. This act first applies to a covenant by a physician not to compete with an employer or principal after the termination of the employment or agency that is in effect on the day before the effective date of this subsection on the day on which the covenant is extended, modified, or renewed, whichever occurs first.

SB686,3,3 (End)