Wisconsin Senate Bill 69. SB 69

Wisconsin Senate Bill 69.  SB 69 would re-write Wisconsin restrictive covenant law.  SB 69 will allow blue-penciling: “If the restraint is overbroad, overlong, or otherwise not reasonably necessary to protect the legitimate business interest, the court shall modify the restraint and grant only such relief as is reasonably necessary to protect that legitimate business.” SB 69 rejects the canons of construction set forth in the Streiff case:  “A court shall construe a restrictive covenant in favor of providing reasonable protection to all legitimate business interests established by the person seeking enforcement of the restrictive covenant. Wisconsin Senate Bill 69.  SB 69 would re-write Wisconsin restrictive covenant law.  SB 69 will allow blue-penciling: “If the restraint is overbroad, overlong, or otherwise not reasonably necessary to protect the legitimate business interest, the court shall modify the restraint and grant only such relief as is reasonably necessary to protect that legitimate business.” SB 69 rejects the canons of construction set forth in the Streiff case:  “A court shall construe a restrictive covenant in favor of providing reasonable protection to all legitimate business interests established by the person seeking enforcement of the restrictive covenant. A court may not employ any rule of contractual interpretation that requires a restrictive covenant to be construed narrowly, against the restraint, or against the drafter of the restrictive covenant.”  SB 69 provides that a court may not consider harm to the individual or public policy: “The court may not consider any individualized economic or other hardship that might be caused to the person against whom enforcement is sought unless that person shows that exceptional personal circumstances exist…. No court may refuse to enforce an otherwise enforceable restrictive covenant on the ground that the restrictive covenant violates public policy unless the court specifically articulates the public policy and finds that the public policy substantially outweighs the policy underlying this section and the need to protect the legitimate business interests established by the person seeking enforcement of the restraint.”  SB 69 includes provisions for attorneys’ fees to the prevailing party: If a restrictive covenant contains a contractual provision authorizing the award of costs and attorney fees to the prevailing party… a court shall award costs and attorney fees in accordance with that contractual provision. If a restrictive covenant does not contain such a contractual provision, a court may award costs and attorney fees to the prevailing party. A court may not enforce any contractual provision limiting the court's authority under this paragraph.” My editorial comment is that the authors of SB 69 fail to recognize that for every business that wants to uphold a non-compete, there is one that wants to defeat it and hire the employee who is being restricted
August 2017