Wisconsin 2023-2024 Regular Session

Wisconsin Assembly Bill AB481 Compare Versions

Only one version of the bill is available at this time.

Old	New	Differences
1	1	LRB-3971/1
2	2	MIM:cjs
3	3	2023 - 2024 LEGISLATURE
4	4	2023 ASSEMBLY BILL 481
5	5	October 12, 2023 - Introduced by Representatives J. ANDERSON, C. ANDERSON, BARE,
6	6	CABRERA, CONLEY, CONSIDINE, EMERSON, GOYKE, HAYWOOD, JOERS, OHNSTAD,
7	7	ORTIZ-VELEZ, PALMERI, RATCLIFF, SHANKLAND, SHELTON, SNODGRASS, STUBBS
8	8	and SUBECK, cosponsored by Senators LARSON, AGARD, CARPENTER, SMITH,
9	9	SPREITZER, TAYLOR and WIRCH. Referred to Committee on Labor and
10	10	Integrated Employment.
11	11	*AUTHORS SUBJECT TO CHANGE*
12	12	AN ACT to renumber and amend 103.465; to amend 103.465 (title); and to
13	13	create 103.465 (1m) and 103.465 (3) and (4) of the statutes; relating to:
14	14	covenants not to compete in employment contracts.
15	15	Analysis by the Legislative Reference Bureau
16	16	Under current law, a restrictive covenant in an employment contract that
17	17	prohibits an assistant, servant, or agent from competing with his or her employer or
18	18	principal during the term of the employment or agency, or after the termination of
19	19	the employment or agency, within a specified territory and during a specified time
20	20	is lawful and enforceable if the restrictions imposed are reasonably necessary for the
21	21	protection of the employer or principal. Such a covenant that imposes an
22	22	unreasonable restraint is illegal, void, and unenforceable even as to any part of the
23	23	covenant or performance that would be a reasonable restraint.
24	24	This bill makes most such covenants illegal, void, and unenforceable after the
25	25	termination of employment or agency. A nondisclosure agreement related to
26	26	personal information of the the employer or principal or the customers of the
27	27	employer or principal or a restrictive covenant prohibiting the unauthorized use by
28	28	a former employee or agent of a customer list or intellectual property owned or
29	29	licensed by the employer or principal is not illegal, void, or unenforceable under the
30	30	bill.
31	31	The people of the state of Wisconsin, represented in senate and assembly, do
32	32	enact as follows:
33	33	1
34	34	2
35	35	3 - 2 -2023 - 2024 Legislature LRB-3971/1
36	36	MIM:cjs
37	37	SECTION 1 ASSEMBLY BILL 481
38	38	SECTION 1. 103.465 (title) of the statutes is amended to read:
39	39	103.465 (title) Restrictive covenants Covenants not to compete in
40	40	employment contracts.
41	41	SECTION 2. 103.465 of the statutes is renumbered 103.465 (2) and amended to
42	42	read:
43	43	103.465 (2) COVENANTS IN EMPLOYMENT CONTRACTS NOT TO COMPETE WHILE
44	44	EMPLOYED. A covenant by an assistant, servant, employee, or agent not to compete
45	45	with his or her employer or principal during the term of the employment or agency,
46	46	or after the termination of that employment or agency, within a specified territory
47	47	and during a specified time is lawful and enforceable only if the restrictions imposed
48	48	are reasonably necessary for the protection of the employer or principal. Any
49	49	covenant, described in this section, imposing subsection, that imposes an
50	50	unreasonable restraint on trade is illegal, void, and unenforceable even as to any part
51	51	of the covenant or performance that would be a reasonable restraint on trade.
52	52	SECTION 3. 103.465 (1m) of the statutes is created to read:
53	53	103.465 (1m) DEFINITIONS. In this section:
54	54	(a) “Copyright” means a work of authorship, including writings, music, and
55	55	works of art, that has been tangibly expressed and that is protected by the federal
56	56	Copyright Act, 17 USC 101 to 1332, or common law.
57	57	(b) “Customer list” means any information about a customer that is not
58	58	available to a competitor of an employer or principal, including personal information
59	59	and past purchases of goods or services from the employer or principal.
60	60	(c) “Intellectual property” means copyrights, patents, trademarks, trade
61	61	secrets, and any other type of commonly recognized intellectual property.
62	62	1
63	63	2
64	64	3
65	65	4
66	66	5
67	67	6
68	68	7
69	69	8
70	70	9
71	71	10
72	72	11
73	73	12
74	74	13
75	75	14
76	76	15
77	77	16
78	78	17
79	79	18
80	80	19
81	81	20
82	82	21
83	83	22
84	84	23
85	85	24 - 3 -2023 - 2024 Legislature
86	86	LRB-3971/1
87	87	MIM:cjs
88	88	SECTION 3
89	89	ASSEMBLY BILL 481
90	90	(d) “Nondisclosure agreement” means a written agreement or provision that
91	91	prohibits the disclosure of personal information about an employer or principal or a
92	92	customer of an employer or principal.
93	93	(e) “Patent” means a right to an invention protected under 35 USC 251 to 329.
94	94	(f) “Trade secret” has the meaning given in s. 134.90 (1) (c).
95	95	SECTION 4. 103.465 (3) and (4) of the statutes are created to read:
96	96	103.465 (3) COVENANTS IN EMPLOYMENT CONTRACTS NOT TO COMPETE AFTER
97	97	TERMINATION OF EMPLOYMENT OR AGENCY. A covenant by an assistant, servant,
98	98	employee, or agent not to compete with his or her employer or principal after the
99	99	termination of the employment or agency imposes an unreasonable restraint on
100	100	trade and is illegal, void, and unenforceable even as to any part of the covenant that
101	101	would be a reasonable restraint on trade. This subsection does not apply to a
102	102	nondisclosure agreement or to a covenant not to compete that is limited to
103	103	prohibiting or restricting the unauthorized use of a customer list or intellectual
104	104	property owned or licensed by the employer or principal.
105	105	(4) NOTICE POSTED. Each employer and principal shall post, in one or more
106	106	conspicuous places where notices to assistants, servants, employees, and agents are
107	107	customarily posted, and in a conspicuous place on the employer's or principal's
108	108	website, if the employer or principal maintains a website, a notice in a form approved
109	109	by the department that explains that covenants not to compete after termination of
110	110	employment or agency, subject to the exceptions in sub. (3), are an unreasonable
111	111	restraint on trade and are illegal, void, and unenforceable.
112	112	SECTION 5.0Initial applicability.
113	113	1
114	114	2
115	115	3
116	116	4
117	117	5
118	118	6
119	119	7
120	120	8
121	121	9
122	122	10
123	123	11
124	124	12
125	125	13
126	126	14
127	127	15
128	128	16
129	129	17
130	130	18
131	131	19
132	132	20
133	133	21
134	134	22
135	135	23 - 4 -2023 - 2024 Legislature LRB-3971/1
136	136	MIM:cjs
137	137	SECTION 5 ASSEMBLY BILL 481
138	138	(1) COVENANT NOT TO COMPETE IN EMPLOYMENT CONTRACTS. This act first applies
139	139	to a covenant not to compete that is entered into, extended, modified, or renewed on
140	140	the effective date of this subsection.
141	141	(END)
142	142	1
143	143	2
144	144	3
145	145	4