Wisconsin Assembly Bill AB481

Wisconsin 2023-2024 Regular Session

• Introduced: 10/12/23
• Refer: 10/12/23
• Failed: 4/15/24

Caption

Covenants not to compete in employment contracts.

Impact

The proposed legislation is expected to significantly alter the landscape of employment agreements in Wisconsin. By preventing employers from enforcing non-compete clauses post-employment, AB481 will empower employees to pursue new positions without fear of legal repercussions. Advocates argue that this could lead to enhanced competition and innovation within the labor market, ultimately benefiting both employees and employers.

Summary

Assembly Bill 481 seeks to amend Wisconsin law regarding covenants not to compete in employment contracts. The bill explicitly makes most non-compete agreements illegal, void, and unenforceable after the termination of employment or agency, except for certain nondisclosure agreements and covenants that protect customer lists or intellectual property. This change aims to reduce barriers for employees seeking new job opportunities and to promote worker mobility across the state.

Contention

The bill has ignited debate among stakeholders, particularly between proponents who believe it encourages economic development, and critics who assert that it may undermine businesses' ability to protect proprietary information and trade secrets. Some business leaders worry that the absence of enforceable non-compete agreements could lead to greater risks associated with employee turnover, while others believe that stronger protections for workers will foster a healthier job market.