"Employee" means a person who may be permitted, required or directed by an employer, in consideration of direct or indirect gain or profit, to engage in any employment.
"Employer" means an individual, partnership, association, corporation, limited liability company, legal representative, trustee, receiver, trustee in bankruptcy, or any common carrier by rail, motor, water or air doing business in or operating within the state.
No employer may require any employee or applicant for employment to pay the cost of a medical examination required by the employer as a condition of employment.
Any employer who violates this section may be fined not more than $100 for each violation. The department shall enforce this section.
The state, its political subdivisions, and the counties are not employers under this section. 69 Atty. Gen. 103.
Eight-hour work day; applicability. 103.38(1)
Subject to sub. (2)
, in all engagements to labor in any manufacturing or mechanical business if there is no express contract to the contrary, a day's work shall consist of 8 hours and all engagements or contracts for labor in a manufacturing or mechanical business shall be so construed.
(2) Subsection (1)
does not apply to any contract for labor by the week, month or year.
History: 1997 a. 253
Fraudulent advertising for labor. 103.43(1)(a)(a)
No person may influence, induce, persuade or attempt to influence, induce, persuade or engage a worker to change from one place of employment to another in this state or to accept employment in this state, and no person may bring a worker of any class or calling into this state to work in any department of labor in this state, through or by means of any false or deceptive representations, false advertising or false pretenses concerning or arising from any of the following:
The amount and character of the compensation to be paid for work.
The failure to state in any advertisement, proposal or contract for the employment that there is a strike or lockout at the place of the proposed employment, when a strike or lockout then actually exists in the employment at the proposed place of employment.
Any of the acts described in par. (a)
shall be considered a false advertisement or misrepresentation for the purposes of this section.
A strike or lockout is considered to exist as long as any of the following conditions exists:
Unemployment on the part of workers affected continues.
Any payments of strike benefits are being made.
Publication is being made of the existence of a strike or lockout.
Any person who, by himself or herself, or by a servant or agent, or as the servant or agent of any other person, or as an officer, director, servant or agent of any firm, corporation, association or organization of any kind, violates sub. (1) (a)
shall be fined not more than $2,000 or imprisoned in the county jail for not more than one year or both.
Any worker who is influenced, induced or persuaded to engage with any person specified in sub. (1) (a)
, through or by means of any of the acts prohibited in sub. (1) (a)
, shall have a right of action for recovery of all damages that the worker sustains in consequence of the false or deceptive representation, false advertising or false pretenses used to induce the worker to change his or her place of employment in this state or to accept employment in this state, against any person, corporation, company or association, directly or indirectly, causing the damage. In addition to all actual damages that the worker may sustain, the worker shall be entitled to recover reasonable attorney fees as determined by the court, to be taxed as costs in any judgment recovered.
Time checks; penalty.
All persons paying wages in time checks or paper, other than legal money, shall make those time checks or that paper payable in some designated place of business in the county in which the work was performed or at the office of the person paying the wages if within this state, or at any bank within this state. Any person failing to comply with this section shall be fined not less than $10 nor more than $100.
History: 1997 a. 253
Deductions for faulty workmanship, loss, theft or damage.
No employer may make any deduction from the wages due or earned by any employee, who is not an independent contractor, for defective or faulty workmanship, lost or stolen property or damage to property, unless the employee authorizes the employer in writing to make that deduction or unless the employer and a representative designated by the employee determine that the defective or faulty workmanship, loss, theft or damage is due to the employee's negligence, carelessness, or willful and intentional conduct, or unless the employee is found guilty or held liable in a court of competent jurisdiction by reason of that negligence, carelessness, or willful and intentional conduct. If any deduction is made or credit taken by any employer that is not in accordance with this section, the employer shall be liable for twice the amount of the deduction or credit taken in a civil action brought by the employee. Any agreement entered into between an employer and employee that is contrary to this section shall be void. In case of a disagreement between the 2 parties, the department shall be the 3rd determining party, subject to any appeal to the court. Section 111.322 (2m)
applies to discharge and other discriminatory acts arising in connection with any proceeding to recover a deduction under this section.
History: 1989 a. 228
; 1997 a. 253
The consent of the employee may only serve as a basis for a deduction if it is given in writing after the loss and before the deduction. Donovan v. Schlesner, 72 Wis. 2d 74
, 240 N.W.2d 135
Termination of an employee-at-will may violate the public policy underlying this section. Wandry v. Bull's Eye Credit, 129 Wis. 2d 37
, 384 N.W.2d 325
Commissions earned over and above a salary are wages under this section. The 6-year statute of limitations, under s. 893.43, applicable to claims for commissions applies to the recovery of deductions from commissions under this section. A claimant need not first bring a claim before DILHR if the employer has never given the employee an opportunity to contest the deductions. Erdman v. Jovoco, Inc. 181 Wis. 2d 736
, 512 N.W.2d 487
The exception to the at-will employment doctrine, founded on well-defined public policy found in this section, does not reach every potential deduction by an employer from an employee's wages. Batteries Plus, LLC v. Mohr, 2001 WI 80
, 244 Wis. 2d 559
, 628 N.W.2d 364
This section necessarily creates a separate and distinct claim from simple breach of contract, and it must be pled as such. Wolnak v. Cardiovascular & Thoracic Surgeons of Central Wisconsin, S.C. 2005 WI App 217
, 287 Wis. 2d 560
, 706 N.W.2d 667
Once an employee earns wages, this section protects that employee from having the employer deduct those earned wages on charges that the employee was responsible for defective or faulty workmanship, or lost or stolen property or damaged property unless one of 3 things occur. The public policy goal of the statute is to prevent the employer from arbitrarily deducting hard earned wages at its prerogative. Farady-Sultze v. Aurora Medical Center of Oshkosh, Inc. 2010 WI App 99
, 327 Wis. 2d 110
; 787 N.W.2d 433
An employer who fired an employee after discovering that it had mistakenly overpaid her and concluding that the employee kept those overpayments to herself, did not run afoul of this statute or the public policy. The employee never earned the extra payments and the statute does not protect her. Farady-Sultze v. Aurora Medical Center of Oshkosh, Inc. 2010 WI App 99
, 327 Wis. 2d 110
; 787 N.W.2d 433
Listing deductions from wages.
An employer shall state clearly on the employee's pay check, pay envelope, or paper accompanying the wage payment the amount of and reason for each deduction from the wages due or earned by the employee, except such miscellaneous deductions as may have been authorized by request of the individual employee for reasons personal to the employee. A reasonable coding system may be used by the employer.
History: 1993 a. 492
Contracts; promises to withdraw from or not to join labor, employers' or cooperative organizations are void.
Every undertaking or promise, whether written or oral, express or implied, constituting or contained in any of the following is declared to be contrary to public policy and wholly void and shall not afford any basis for the granting of any legal or equitable relief by any court:
A contract or agreement of hiring or employment between any employer and any employee or prospective employee, in which either party to the contract or agreement undertakes or promises not to join, become or remain a member of any labor organization or of any organization of employers, or in which either party to the contract or agreement undertakes or promises to withdraw from the employment relation if the party joins, becomes or remains a member of any labor organization or of any organization of employers.
A contract or agreement for the sale of agricultural, horticultural or dairy products between a producer of those products and a distributor or purchaser of those products, in which either party to the contract or agreement undertakes or promises not to join, become or remain a member of any cooperative association organized under ch. 185
or of any trade association of the producers, distributors or purchasers of those products.
Restrictive covenants in employment contracts.
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, described in this subsection, 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.
History: 1995 a. 225
; 1997 a. 253
A provision in an employer's profit-sharing and retirement plan that calls for the forfeiture of benefits by employees who engage in competitive enterprises is valid and enforceable only if it meets the requirements of this section. Holsen v. Marshall & Ilsley Bank, 52 Wis. 2d 281
, 190 N.W.2d 189
A provision of a pension plan denying benefits if the retired employee accepts any employment in the same industry without limit as to time or area is void. Estate of Schroeder, 53 Wis. 2d 59
, 191 N.W.2d 860
This section, limiting the enforceability of covenants not to compete to those containing restrictions reasonably necessary for the protection of the employer or principal, incorporates pre-existing common law principals that contracts in restraint of trade are viewed with disfavor. Behnke v. Hertz Corp. 70 Wis. 2d 818
, 235 N.W.2d 690
A profit-sharing plan that provided for forfeiture in the event that a covered employee worked for a "competitive business" was construed to apply only to businesses that seek out and appeal to the same customers and offer substantially identical services. Zimmerman v. Brennan, 78 Wis. 2d 510
, 254 N.W.2d 719
The basic requirements for an enforceable restrictive covenant are that the agreement must: 1) be necessary for the protection of the employer; 2) provide a reasonable time period; 3) cover a reasonable territory; 4) not be unreasonable to the employee; 5) not be unreasonable to the general public. Chuck Wagon Catering, Inc. v. Raduege, 88 Wis. 2d 740
, 277 N.W.2d 787
A covenant prohibiting an executive employee from contacting company clients with whom the employee had had no previous contact was not unreasonable per se. Hunter of Wisconsin, Inc. v. Hamilton, 101 Wis. 2d 460
, 304 N.W.2d 752
A covenant not to compete is not automatically voided by the presence of an unreasonable provision for liquidated damages. Whether specific restraints as to area and time are necessary to protect the employer is a question of law to be resolved on the basis of the facts. Fields Foundation, Ltd. v. Christensen, 103 Wis. 2d 465
, 309 N.W.2d 125
(Ct. App. 1981).
An agreement requiring agents of an insurance company to forfeit their extended earnings if after termination they engaged in certain competitive practices was unenforceable. Streiff v. American Family Mutual Insurance Co. 118 Wis. 2d 602
, 348 N.W.2d 505
Territorial limits in a restrictive covenant need not be expressed in geographical terms. General Medical Corp. v. Kobs, 179 Wis. 2d 422
, 507 N.W.2d 381
(Ct. App. 1993).
An employer is not entitled to protection against ordinary competition of the type a stranger would give. There must be special facts that render the covenant necessary for the protection of the employer's business. Wausau Medical Center v. Asplund, 182 Wis. 2d 274
, 514 N.W.2d 34
(Ct. App. 1994).
A valid covenant not to compete requires consideration. Continued employment, absent a requirement that the employment requires executing the agreement, is not consideration. NBZ, Inc. v. Pilarski, 185 Wis. 2d 827
, 520 N.W.2d 93
(Ct. App. 1994).
This section sets out its own remedy. A violation does not grant an automatic right to pursue a wrongful discharge claim, but voids the covenant. Tatge v. Chambers and Owens, Inc. 210 Wis. 2d 51
, 565 N.W.2d 150
(Ct. App. 1997), 95-2928
It would be an exercise in semantics to overlook this section merely because a contract provision is labeled a non-disclosure provision rather than a covenant not to compete. This section does not create an exception to the at-will employment doctrine that would allow an employee to refuse to sign a non-disclosure or non-compete clause that the employee considers to be unreasonable. Tatge v. Chambers & Owen, Inc. 219 Wis. 2d 99
, 579 N.W.2d 217
Any part of an indivisible covenant, even if reasonable on its own, will not be given effect if any other part is unreasonable. A provision that an insurance agent was to have no contact with company clients without geographic restriction was overbroad, as was a provision that the agent not work for a named competitor in any capacity. Mutual Service Casualty Insurance Co. v. Brass, 2001 WI App 92
, 242 Wis. 2d 733
, 625 N.W.2d 648
"Specified territory" in this section encompasses customer lists as well as geographic locations. A covenant not to compete based on a customer list limitation is not invalid per se. Farm Credit Services of North Central Wisconsin v. Wysocki, 2001 WI 51
, 243 Wis. 2d 305
, 627 N.W.2d 444
A covenant not to compete cannot escape the requirement of territorial reasonableness by not including any geographical parameters. A covenant without any specified territory is void. Equity Enterprises, Inc. v. Milosch, 2001 WI App 186
, 247 Wis. 2d 172
, 633 N.W.2d 662
A penalty provision in a contract that is invoked if there is a violation of an unreasonable covenant not to compete must be read with, and is intertwined with, the covenant. As such, it is an unreasonable covenant itself. Equity Enterprises, Inc. v. Milosch, 2001 WI App 186
, 247 Wis. 2d 172
, 633 N.W.2d 662
An employer is not allowed to circumvent the protections under this section by restricting the employment opportunities of its employees through contracts with other employers without employee knowledge and consent. An employer cannot indirectly restrict employees in a way that it cannot do directly under this section. Heyde Companies, Inc. v. Dove Healthcare, LLC, 2002 WI 131
, 258 Wis. 2d 28
, 654 N.W.2d 830
A provision extending the time period in a noncompete clause "by any period(s) of violations" was unreasonable and rendered the clause entirely void under this section. The effect of the extension provision made the duration of the restraint not a fixed and definite time period but a time period contingent upon outcomes the employee could not predict. H&R Block Eastern Enterprises, Inc. v. Swenson, 2008 WI App 3
, 307 Wis. 2d 390
, 745 N.W.2d 421
A clause that prohibited a former employee from contacting "past customers," defined as those who purchased from the former employer within one year prior to the employee's termination, was reasonable and enforceable. Star Direct, Inc. v. Eugene Dal Pra, 2009 WI 76
, 319 Wis. 2d 274
, 767 N.W.2d 898
A clause that prohibited a former employee from engaging "in any business which is substantially similar to or in competition with" the former employer was unreasonable and unenforceable. As the disjunctive "or" plainly separates a substantially similar business from one "in competition with" the employer, the only reasonable reading, giving meaning to every phrase, is that it attempts to bar the former employee not only from competitive enterprises, but also from engaging in a business that is not competitive. Star Direct, Inc. v. Eugene Dal Pra, 2009 WI 76
, 319 Wis. 2d 274
, 767 N.W.2d 898
The legislative history and text of this section do not eliminate or modify the common law rules on divisibility. In the context of multiple non-compete provisions in a contract, indivisibility will usually be seen by an intertwining, or inextricable link, between the various provisions via a textual reference such that one provision cannot be read or interpreted without reference to the other. Restrictive covenants are divisible when the contract contains different covenants supporting different interests that can be independently read and enforced. Overlap, even substantial overlap, between clauses is not necessarily determinative. Star Direct, Inc. v. Eugene Dal Pra, 2009 WI 76
, 319 Wis. 2d 274
, 767 N.W.2d 898
The common law's rule of reason, not this section, governed the validity of the covenant not to compete contained in the stock option agreement in this case. This section has been applied in circumstances where the restrictive covenant is contained in a document other than the employment agreement, but the employer nonetheless enjoys a bargaining advantage over employees. Here the employer had no bargaining advantage, there were no consequences attached to a refusal to accept the agreement, and the employee received the benefit of his bargain. The Selmer Company v. Rinn, 2010 WI App 106
, 328 Wis. 2d_263, 789 N.W.2d 621
This section does not apply to franchisees under franchise agreements. H&R Block Eastern Tax Services, Inc. v. Vorpahl, 255 F. Supp. 2d 930
A restrictive covenant was not overbroad. Brunswick Corp. v. Jones, 784 F.2d 271
An agreement to accept an education loan funded by certain employers on the condition that the recipient repay it in kind by working for a contributor or repaying it in cash if the recipient accepts employment with a non-contributor was not a covenant subject to s. 103.465. Milwaukee Apprentice Training Committee v. Howell, 67 F.3d 1333
An obligation to repay an employer's costs for training an employee if the employee did not remain employed for a specified time was not a covenant not to compete under this section. This section applies only to the extent a consequence is linked to working for the employer's competition. Heder v. City of Two Rivers, 295 F.3d 777
The public policy underlying this section is that Wisconsin law favors the mobility of workers. Compliance with a contractual obligation to return property already belonging to an employer does not violate public policy concerning employee mobility. Genzyme Corporation v. Bishop, 463 F. Supp. 94
Nondisclosure agreements at issue in this case were not covered by this section. Even if a nondisclosure provision restricts disclosure of trade secret information, if it also restricts disclosure of information that is not a trade secret, this section requires a time limitation on the provision. Friemuth v. Fiskars Brands, Inc. 681 F. Supp. 2d 985
Drafting and enforcing restrictive covenants not to compete. Richards, 55 MLR 241.
Drafting enforceable covenants not to compete. Nettesheim. WBB Oct. 1986.
Can Employers Force Employees to Sign Noncompete Agreements as a Condition of Their Employment? Cohen & Stuart. Wis. Law. May 1999.
Protecting Business Interests With Covenants Not to Compete. Mc Neilly & Krzoska. Wis. Law. May 2006.
Star Direct Takes Restrictive Covenant Law in a New Direction. Backer. Wis. Law. Nov. 2009.
Wage rate on state work. 103.49(1)(a)
"Area" means the county in which a proposed project of public works that is subject to this section is located or, if the department determines that there is insufficient wage data in that county, "area" means those counties that are contiguous to that county or, if the department determines that there is insufficient wage data in those counties, "area" means those counties that are contiguous to those counties or, if the department determines that there is insufficient wage data in those counties, "area" means the entire state or, if the department is requested to review a determination under sub. (3) (c)
, "area" means the city, village, or town in which a proposed project of public works that is subject to this section is located.
"Bona fide economic benefit" means an economic benefit for which an employer makes irrevocable contributions to a trust or fund created under 29 USC 186
(c) or to any other bona fide plan, trust, program, or fund no less often than quarterly or, if an employer makes annual contributions to such a bona fide plan, trust, program, or fund, for which the employer irrevocably escrows moneys at least quarterly based on the employer's expected annual contribution.
"Hourly basic rate of pay" means the hourly wage paid to any employee, excluding any contributions or payments for health insurance benefits, vacation benefits, pension benefits and any other bona fide economic benefits, whether paid directly or indirectly.
"Insufficient wage data" means less than 500 hours of work performed in a particular trade or occupation on projects that are similar to a proposed project of public works that is subject to this section.
"Minor service or maintenance work" means a project of public works that is limited to minor crack filling, chip or slurry sealing, or other minor pavement patching, not including overlays, that has a projected life span of no longer than 5 years cleaning of drainage or sewer ditches or structures; or any other limited, minor work on public facilities or equipment that is routinely performed to prevent breakdown or deterioration.