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Employment Agreement Update - Non-solicitation

Posted Tuesday, April 10, 2018

On January 19, 2018, in Manitowac Co., Inc. v. Lanning, the Wisconsin Supreme Court ruled that a non-solicitation of employees clause in an employment agreement was covered by the state's statute limiting the enforceability of covenants not to compete between employers and their employees.  The Court held that this employer could not rely on its non-solicitation provision to prevent a former employee from soliciting its employees.  This decision brings non-solicitation provisions under Wisconsin's restrictive covenant statute, which primarily has been used to limit non-competition provisions in employment agreements.

The Court's decision relied heavily on the fact that the non-solicitation provision at issue was drafted very broadly, preventing the former employee from soliciting any of the company's employees on behalf of any competitor of the company.  This is noteworth for many Wisconsin businesses, as it is the first time a Wisconsin court has applied this stringent standard.  Employers doing business in Wisconsin should review and update their employment agreements, taking care to draft non-solicitation provisions that are narrow in scope.

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