2023 - 2024 LEGISLATURE
October 12, 2023 - Introduced by Representatives J. Anderson, C. Anderson, Bare,
Cabrera, Conley, Considine, Emerson, Goyke, Haywood, Joers, Ohnstad,
Ortiz-Velez, Palmeri, Ratcliff, Shankland, Shelton, Snodgrass, Stubbs
and Subeck, cosponsored by Senators Larson, Agard, Carpenter, Smith,
Spreitzer, Taylor and Wirch. Referred to Committee on Labor and
1An Act to renumber and amend
103.465; to amend
103.465 (title); and to
103.465 (1m) and 103.465 (3) and (4) of the statutes; relating to:
3covenants not to compete in employment contracts.
Analysis by the Legislative Reference Bureau
Under current law, a restrictive covenant in an employment contract that
prohibits an assistant, servant, or agent from competing 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 if the restrictions imposed are reasonably necessary for the
protection of the employer or principal. Such a covenant that imposes an
unreasonable restraint is illegal, void, and unenforceable even as to any part of the
covenant or performance that would be a reasonable restraint.
This bill makes most such covenants illegal, void, and unenforceable after the
termination of employment or agency. A nondisclosure agreement related to
personal information of the the employer or principal or the customers of the
employer or principal or a restrictive covenant prohibiting the unauthorized use by
a former employee or agent of a customer list or intellectual property owned or
licensed by the employer or principal is not illegal, void, or unenforceable under the
The people of the state of Wisconsin, represented in senate and assembly, do
enact as follows:
103.465 (title) of the statutes is amended to read:
(title) Restrictive covenants Covenants not to compete in
103.465 of the statutes is renumbered 103.465 (2) and amended to 5
103.465 (2) Covenants in employment contracts not to compete while
covenant by an assistant, servant, employee,
or agent not to compete 8
with his or her employer or principal during the term of the employment or agency,
9or after the termination of that employment or agency,
within a specified territory 10
and during a specified time is lawful and enforceable only if the restrictions imposed 11
are reasonably necessary for the protection of the employer or principal. Any 12
covenant, described in this section, imposing
subsection, that imposes
unreasonable restraint on trade
is illegal, void
and unenforceable even as to any part 14
of the covenant or performance that would be a reasonable restraint
103.465 (1m) of the statutes is created to read:
103.465 (1m) Definitions.
In this section:
(a) “Copyright” means a work of authorship, including writings, music, and 18
works of art, that has been tangibly expressed and that is protected by the federal 19
Copyright Act, 17 USC 101
, or common law.
(b) “Customer list” means any information about a customer that is not 21
available to a competitor of an employer or principal, including personal information 22
and past purchases of goods or services from the employer or principal.
(c) “Intellectual property” means copyrights, patents, trademarks, trade 24
secrets, and any other type of commonly recognized intellectual property.
(d) “Nondisclosure agreement” means a written agreement or provision that 2
prohibits the disclosure of personal information about an employer or principal or a 3
customer of an employer or principal.
(e) “Patent” means a right to an invention protected under 35 USC 251
(f) “Trade secret” has the meaning given in s. 134.90 (1) (c).
103.465 (3) and (4) of the statutes are created to read:
103.465 (3) Covenants in employment contracts not to compete after
8termination of employment or agency.
A covenant by an assistant, servant, 9
employee, or agent not to compete with his or her employer or principal after the 10
termination of the employment or agency imposes an unreasonable restraint on 11
trade and is illegal, void, and unenforceable even as to any part of the covenant that 12
would be a reasonable restraint on trade. This subsection does not apply to a 13
nondisclosure agreement or to a covenant not to compete that is limited to 14
prohibiting or restricting the unauthorized use of a customer list or intellectual 15
property owned or licensed by the employer or principal.
16(4) Notice posted.
Each employer and principal shall post, in one or more 17
conspicuous places where notices to assistants, servants, employees, and agents are 18
customarily posted, and in a conspicuous place on the employer's or principal's 19
website, if the employer or principal maintains a website, a notice in a form approved 20
by the department that explains that covenants not to compete after termination of 21
employment or agency, subject to the exceptions in sub. (3), are an unreasonable 22
restraint on trade and are illegal, void, and unenforceable.
(1) Covenant not to compete in employment contracts.
This act first applies 2
to a covenant not to compete that is entered into, extended, modified, or renewed on 3
the effective date of this subsection.