Legal Question in Business Law in Wisconsin

Non compete clauses

I am an Executive recruiter. My current employer and I have a non compete clause.

Restrictions are 50 mile geographic radius, no recruiting or ''accepting any business in competition with the business of Employer...who was, at any time prior thereto, a customer or client of Employer and who was serviced personally by Employee within one year immediately preceding such termination.''

This language is not clear on what constitutes ''service'' and what constitutes a customer or client. In my mind a client is defined as someone who my employer has done business resulting in economic benefit (i.e. a placement or retainer). It would not constitute a company where in the past my employer may have had a contingency job order but no placement or economic benefit gained by my employer.

Is this interpretation one that would reasonably withstand scruitiny in Wisconsin or is a more liberal view likely to be held to encompass potential customers as well?

Secondly, if I formally offer to buy out this contract with clearly defined definitions that protect my current employer's business interest and it is rejected by my employer, does this factor into how the court will view the non-compete agreement?


Asked on 1/21/02, 12:16 pm

1 Answer from Attorneys
Thomas Schober Schober Schober & Mitchell, S.C.

Re: Non compete clauses

Your request is interesting. You indicate that your

covenant deal with the words "customer or client".

While it is true that the word "client" implies a

relationship that may imply economic benefit, there

must be presumed a reason why the drafter of the

covenant used both the words "client" and "customer."

In Wisconsin, while courts generally give covenants

a pretty harsh reading, I believe it is quite

conceivable that anyone that your company spent

time, effort or dollars on contacting during the

one year period mentioned would conceivably be

considered a "customer." Obviously, that is an

interpretation that may differ from judge to judge,

but I'm fairly confident that your covenant language

was intended to protect the employer from losing

business that the employer was invested in.

Your second question is more difficult. If this

matter were raised to the level of litigation,

settlement negotiations and offers to settle are

not evidentiary. Since you may be at that stage,

proper negotiation, taking the position that you

dispute the validity of the covenant, my give you

the legal standing to challenge any admission of

the offers to settle into any further action.

Read more
Answered on 1/23/02, 11:43 am


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