Legal Question in Business Law in Wisconsin

Reasonable guidelines for a non-compete agreement

When drafting a non-compete agreement, it is my understanding that there need to be certain ''reasonable'' guidelines set, as they pertain to geographic area and time.

My question is what are the maximum values that be given to these guidelines before the agreement becomes unenforceable? Particularly in the aspect of geographic region. Our company operates across the northern 2/3 of the state. We realize that this is too large of an area to enforce, but we would like to know how far we can possibly extend the boundaries of our agreement.


Asked on 12/28/01, 5:06 pm

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

Re: Reasonable guidelines for a non-compete agreement

There are 2 types of Covenants not to Compete in

Wisconsin: those associated with employment and

all others, such as those associated with the

sale of a business. I would presume you question

deals with those in employment agreements. In that

regard, section 103.465 of the Wisconsin Statutes,

together with a myriad of cases, determines what

constitutes a valid and enforceable covenant. While

you are correct that geographic area must be

reasonable, there are other ways to resolve that.

One such way is to limit the covenant to "customers."

In that way, geographical limits are no longer

needed.

There are other significant issues related to covenants,

such as duration and consideration. You should be

sure you contact a qualified business attorney to

assure your covenants are drafted as well as they

can be, since even the best drafted covenants are

not always given the best shake in a court of law.

Good luck in you endeavor. Have a Happy New Year!

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Answered on 12/31/01, 11:29 am


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