103.465 Annotation 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 (1981).
103.465 Annotation 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).
103.465 Annotation 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 (1984).
103.465 Annotation 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).
103.465 Annotation 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).
103.465 Annotation 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).
103.465 Annotation 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.
103.465 Annotation 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 (1998), 95-2928.
103.465 Annotation 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, 00-2681.
103.465 Annotation "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, 99-1013.
103.465 Annotation 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, 00-2827.
103.465 Annotation 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, 00-2827.
103.465 Annotation 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, 01-0863.
103.465 Annotation 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, 06-1210.
103.465 Annotation 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, 07-0617.
103.465 Annotation 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, 07-0617.
103.465 Annotation 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, 07-0617.
103.465 Annotation 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, 09-1353.
103.465 Annotation This section does not apply to franchisees under franchise agreements. H&R Block Eastern Tax Services, Inc. v. Vorpahl, 255 F. Supp. 2d 930 (2003).
103.465 AnnotationA restrictive covenant was not overbroad. Brunswick Corp. v. Jones, 784 F.2d 271 (1986).
103.465 Annotation 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 (1995).
103.465 Annotation 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 (2002).
103.465 Annotation 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 (2006).
103.465 Annotation 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 (2010).
103.465 Annotation Drafting and enforcing restrictive covenants not to compete. Richards, 55 MLR 241.
103.465 Annotation Drafting enforceable covenants not to compete. Nettesheim. WBB Oct. 1986.
103.465 Annotation Can Employers Force Employees to Sign Noncompete Agreements as a Condition of Their Employment? Cohen & Stuart. Wis. Law. May 1999.
103.465 Annotation Protecting Business Interests With Covenants Not to Compete. Mc Neilly & Krzoska. Wis. Law. May 2006.
103.465 Annotation Star Direct Takes Restrictive Covenant Law in a New Direction. Backer. Wis. Law. Nov. 2009.
103.49 103.49 Wage rate on state work.
103.49(1) (1) Definitions. In this section:
103.49(1)(a) (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.
103.49(1)(am) (am) "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.
103.49(1)(b) (b) "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.
103.49(1)(bg) (bg) "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.
103.49(1)(bj) (bj) "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.
103.49(1)(br) (br) "Multiple-trade project of public works" means a project of public works in which no single trade accounts for 85 percent or more of the total labor cost of the project.
103.49(1)(c) (c) "Prevailing hours of labor" for any trade or occupation in any area means 10 hours per day and 40 hours per week and may not include any hours worked on a Saturday or Sunday or on any of the following holidays:
103.49(1)(c)1. 1. January 1.
103.49(1)(c)2. 2. The last Monday in May.
103.49(1)(c)3. 3. July 4.
103.49(1)(c)4. 4. The first Monday in September.
103.49(1)(c)5. 5. The 4th Thursday in November.
103.49(1)(c)6. 6. December 25.
103.49(1)(c)7. 7. The day before if January 1, July 4 or December 25 falls on a Saturday.
103.49(1)(c)8. 8. The day following if January 1, July 4 or December 25 falls on a Sunday.
103.49(1)(d)1.1. Except as provided in subd. 2., "prevailing wage rate" for any trade or occupation engaged in the erection, construction, remodeling, repairing or demolition of any project of public works in any area means the hourly basic rate of pay, plus the hourly contribution for health insurance benefits, vacation benefits, pension benefits and any other bona fide economic benefit, paid directly or indirectly for a majority of the hours worked in the trade or occupation on projects in the area.
103.49(1)(d)2. 2. If there is no rate at which a majority of the hours worked in the trade or occupation on projects in the area is paid, "prevailing wage rate" for any trade or occupation engaged in the erection, construction, remodeling, repairing or demolition of any project of public works in any area means the average hourly basic rate of pay, weighted by the number of hours worked, plus the average hourly contribution, weighted by the number of hours worked, for health insurance benefits, vacation benefits, pension benefits and any other bona fide economic benefit, paid directly or indirectly for all hours worked at the hourly basic rate of pay of the highest-paid 51% of hours worked in that trade or occupation on projects in that area.
103.49(1)(em) (em) "Single-trade project of public works" means a project of public works in which a single trade accounts for 85 percent or more of the total labor cost of the project.
103.49(1)(f) (f) "State agency" means any office, department, independent agency, institution of higher education, association, society or other body in state government created or authorized to be created by the constitution or any law, including the legislature and the courts. "State agency" also includes the University of Wisconsin Hospitals and Clinics Authority, the Fox River Navigational System Authority, and the Wisconsin Aerospace Authority.
103.49(1)(fm) (fm) "Supply and installation contract" means a contract under which the material is installed by the supplier, the material is installed by means of simple fasteners or connectors such as screws or nuts and bolts and no other work is performed on the site of the project of public works, and the total labor cost to install the material does not exceed 20 percent of the total cost of the contract.
103.49(1)(g) (g) "Truck driver" includes an owner-operator of a truck.
103.49(1m) (1m)Applicability. Subject to sub. (3g), this section applies to any project of public works erected, constructed, repaired, remodeled, or demolished for the state or a state agency, including all of the following:
103.49(1m)(a) (a) A project erected, constructed, repaired, remodeled, or demolished by one state agency for another state agency under any contract or under any statute specifically authorizing cooperation between state agencies.
103.49(1m)(b) (b) A project in which the completed facility is leased, purchased, lease purchased, or otherwise acquired by, or dedicated to, the state in lieu of the state or a state agency contracting for the erection, construction, repair, remodeling, or demolition of the facility.
103.49(1m)(c) (c) A "sanitary sewer" or water main project in which the completed sanitary sewer or water main is acquired by, or dedicated to, the state for ownership or maintenance by the state.
103.49(2) (2)Prevailing wage rates and hours of labor. Any contract made for the erection, construction, remodeling, repairing, or demolition of any project of public works to which the state or any state agency is a party shall contain a stipulation that no person performing the work described in sub. (2m) may be permitted to work a greater number of hours per day or per week than the prevailing hours of labor, except that any such person may be permitted or required to work more than such prevailing hours of labor per day and per week if he or she is paid for all hours worked in excess of the prevailing hours of labor at a rate of at least 1.5 times his or her hourly basic rate of pay; nor may he or she be paid less than the prevailing wage rate determined under sub. (3) in the same or most similar trade or occupation in the area in which the project of public works is situated. A reference to the prevailing wage rates determined under sub. (3) and the prevailing hours of labor shall be published in the notice issued for the purpose of securing bids for the project. If any contract or subcontract for a project of public works that is subject to this section is entered into, the prevailing wage rates determined under sub. (3) and the prevailing hours of labor shall be physically incorporated into and made a part of the contract or subcontract, except that for a minor subcontract, as determined by the department, the department shall prescribe by rule the method of notifying the minor subcontractor of the prevailing wage rates and prevailing hours of labor applicable to the minor subcontract. The prevailing wage rates and prevailing hours of labor applicable to a contract or subcontract may not be changed during the time that the contract or subcontract is in force.
103.49(2m) (2m)Covered employees.
103.49(2m)(a)(a) Subject to par. (b), all of the following employees shall be paid the prevailing wage rate determined under sub. (3) and may not be permitted to work a greater number of hours per day or per week than the prevailing hours of labor, unless they are paid for all hours worked in excess of the prevailing hours of labor at a rate of at least 1.5 times their hourly basic rate of pay:
103.49(2m)(a)1. 1. All laborers, workers, mechanics, and truck drivers employed on the site of a project of public works that is subject to this section.
103.49(2m)(a)2. 2. All laborers, workers, mechanics, and truck drivers employed in the manufacturing or furnishing of materials, articles, supplies, or equipment on the site of a project of public works that is subject to this section or from a facility dedicated exclusively, or nearly so, to a project of public works that is subject to this section by a contractor, subcontractor, agent, or other person performing any work on the site of the project.
103.49(2m)(b) (b) A laborer, worker, mechanic, or truck driver who is employed to process, manufacture, pick up, or deliver materials or products from a commercial establishment that has a fixed place of business from which the establishment supplies processed or manufactured materials or products or from a facility that is not dedicated exclusively, or nearly so, to a project of public works that is subject to this section is not entitled to receive the prevailing wage rate determined under sub. (3) or to receive at least 1.5 times his or her hourly basic rate of pay for all hours worked in excess of the prevailing hours of labor unless any of the following applies:
103.49(2m)(b)1. 1. The laborer, worker, mechanic, or truck driver is employed to go to the source of mineral aggregate such as sand, gravel, or stone and deliver that mineral aggregate to the site of a project of public works that is subject to this section by depositing the material directly in final place, from the transporting vehicle or through spreaders from the transporting vehicle.
103.49(2m)(b)2. 2. The laborer, worker, mechanic, or truck driver is employed to go to the site of a project that is subject to this section, pick up excavated material or spoil from the site of the project of public works and transport that excavated material or spoil away from the site of the project.
103.49(2m)(c) (c) A truck driver who is an owner-operator of a truck shall be paid separately for his or her work and for the use of his or her truck.
103.49(3) (3)Investigation; determination.
103.49(3)(a)(a) Before bids are asked for any work to which this section applies, the state agency having the authority to prescribe the specifications shall apply to the department to determine the prevailing wage rate for each trade or occupation required in the work under contemplation in the area in which the work is to be done. The department shall conduct investigations and hold public hearings as necessary to define the trades or occupations that are commonly employed on projects that are subject to this section and to inform itself as to the prevailing wage rates in all areas of the state for those trades or occupations, in order to determine the prevailing wage rate for each trade or occupation. The department shall issue its determination within 30 days after receiving the request and shall file the determination with the requesting state agency. For the information of the employees working on the project, the prevailing wage rates determined by the department, the prevailing hours of labor and the provisions of subs. (2) and (6m) shall be kept posted by the state agency in at least one conspicuous and easily accessible place on the site of the project.
103.49(3)(am) (am) The department shall, by January 1 of each year, compile the prevailing wage rates for each trade or occupation in each area. The compilation shall, in addition to the current prevailing wage rates, include future prevailing wage rates when those prevailing wage rates can be determined for any trade or occupation in any area and shall specify the effective date of those future prevailing wage rates. If a project of public works extends into more than one area there shall be but one standard of prevailing wage rates for the entire project.
103.49(3)(ar) (ar) In determining prevailing wage rates under par. (a) or (am), the department may not use data from projects that are subject to this section, s. 66.0903, 103.50, or 229.8275, or 40 USC 3142 unless the department determines that there is insufficient wage data in the area to determine those prevailing wage rates, in which case the department may use data from projects that are subject to this section, s. 66.0903, 103.50, or 229.8275, or 40 USC 3142. In determining prevailing wage rates under par. (a) or (am), the department may not use data from any construction work performed by a state agency or a local governmental unit, as defined in s. 66.0903 (1) (d).
103.49(3)(b) (b) Any person may request a recalculation of any portion of an initial determination within 30 days after the initial determination date if the person submits evidence with the request showing that the prevailing wage rate for any given trade or occupation included in the initial determination does not represent the prevailing wage rate for that trade or occupation in the area. The evidence shall include wage rate information reflecting work performed by persons working in the contested trade or occupation in the area during the current survey period. The department shall affirm or modify the initial determination within 15 days after the date on which the department receives the request for recalculation.
103.49(3)(c) (c) In addition to the recalculation under par. (b), the state agency that requested the determination under this subsection may request a review of any portion of a determination within 30 days after the date of issuance of the determination if the state agency submits evidence with the request showing that the prevailing wage rate for any given trade or occupation included in the determination does not represent the prevailing wage rate for that trade or occupation in the city, village, or town in which the proposed project of public works is located. That evidence shall include wage rate information for the contested trade or occupation on at least 3 similar projects located in the city, village, or town where the proposed project of public works is located on which some work has been performed during the current survey period and which were considered by the department in issuing its most recent compilation under par. (am). The department shall affirm or modify the determination within 15 days after the date on which the department receives the request for review.
103.49(3g) (3g)Nonapplicability. This section does not apply to any of the following:
103.49(3g)(a) (a) A single-trade project of public works for which the estimated project cost of completion is less than $48,000 or a multiple-trade project of public works for which the estimated project cost of completion is less than $100,000.
103.49(3g)(b) (b) Work performed on a project of public works for which the state or the state agency contracting for the project is not required to compensate any contractor, subcontractor, contractor's or subcontractor's agent, or individual for performing the work.
103.49(3g)(c) (c) Minor service or maintenance work, warranty work, or work under a supply and installation contract.
103.49(3g)(f) (f) A public highway, street, or bridge project.
103.49(3g)(g) (g) A project of public works involving the erection, construction, repair, remodeling, or demolition of a residential property containing 2 dwelling units or less.
103.49(3g)(h) (h) A road, street, bridge, sanitary sewer, or water main project that is a part of a development in which not less than 90 percent of the lots contain or will contain 2 dwelling units or less, as determined by the local governmental unit at the time of approval of the development, and that, on completion, is acquired by, or dedicated to, the state for ownership or maintenance by the state.
103.49(4r) (4r)Compliance.
103.49(4r)(a)(a) When the department finds that a state agency has not requested a determination under sub. (3) (a) or that a state agency, contractor or subcontractor has not physically incorporated a determination into a contract or subcontract as required under sub. (2) or has not notified a minor subcontractor of a determination in the manner prescribed by the department by rule promulgated under sub. (2), the department shall notify the state agency, contractor or subcontractor of the noncompliance and shall file the determination with the state agency, contractor or subcontractor within 30 days after such notice.
103.49(4r)(b) (b) Upon completion of a project of public works and before receiving final payment for his or her work on the project, each agent or subcontractor shall furnish the contractor with an affidavit stating that the agent or subcontractor has complied fully with the requirements of this section. A contractor may not authorize final payment until the affidavit is filed in proper form and order.
103.49(4r)(c) (c) Upon completion of a project of public works and before receiving final payment for his or her work on the project, each contractor shall file with the state agency authorizing the work an affidavit stating that the contractor has complied fully with the requirements of this section and that the contractor has received an affidavit under par. (b) from each of the contractor's agents and subcontractors. A state agency may not authorize a final payment until the affidavit is filed in proper form and order. If a state agency authorizes a final payment before an affidavit is filed in proper form and order or if the department determines, based on the greater weight of the credible evidence, that any person performing the work specified in sub. (2m) has been or may have been paid less than the prevailing wage rate or less than 1.5 times the hourly basic rate of pay for all hours worked in excess of the prevailing hours of labor and requests that the state agency withhold all or part of the final payment, but the state agency fails to do so, the state agency is liable for all back wages payable up to the amount of the final payment.
103.49(5) (5)Records; inspection; enforcement.
103.49(5)(a)(a) Each contractor, subcontractor, or contractor's or subcontractor's agent performing work on a project of public works that is subject to this section shall keep full and accurate records clearly indicating the name and trade or occupation of every person performing the work described in sub. (2m) and an accurate record of the number of hours worked by each of those persons and the actual wages paid for the hours worked.
103.49(5)(b) (b) It shall be the duty of the department to enforce this section. To this end it may demand and examine, and every contractor, subcontractor, and contractor's and subcontractor's agent shall keep, and furnish upon request by the department, copies of payrolls and other records and information relating to the wages paid to persons performing the work described in sub. (2m) for work to which this section applies. The department may inspect records in the manner provided in this chapter. Every contractor, subcontractor, or agent performing work on a project of public works that is subject to this section is subject to the requirements of this chapter relating to the examination of records. Section 111.322 (2m) applies to discharge and other discriminatory acts arising in connection with any proceeding under this section.
103.49(5)(c) (c) If requested by any person, the department shall inspect the payroll records of any contractor, subcontractor, or agent performing work on a project of public works that is subject to this section as provided in this paragraph to ensure compliance with this section. On receipt of such a request, the department shall request the contractor, subcontractor, or agent to submit to the department a certified record of the information specified in par. (a), other than personally identifiable information relating to an employee of the contractor, subcontractor, or agent, for no longer than a 4-week period. The department may request a contractor, subcontractor, or agent to submit those records no more than once per calendar quarter for each project of public works on which the contractor, subcontractor, or agent is performing work. The department may not charge a requester a fee for obtaining that information. The department shall make available for public inspection certified records submitted to the department under this paragraph.
103.49(6m) (6m)Liability and penalties.
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2011-12 Wisconsin Statutes updated though 2013 Wis. Act 380 and all Supreme Court Orders entered before June 30, 2014. Published and certified under s. 35.18. Changes effective after July 1, 2014 are designated by NOTES. (Published 7-1-14)