Wisconsin 2023-2024 Regular Session

Wisconsin Senate Bill SB566 Compare Versions

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

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3	3	2023 - 2024 LEGISLATURE
4	4	2023 SENATE BILL 566
5	5	October 23, 2023 - Introduced by Senators LARSON, AGARD, CARPENTER, SMITH,
6	6	SPREITZER, TAYLOR and WIRCH, cosponsored by Representatives J. ANDERSON,
7	7	C. ANDERSON, BARE, CABRERA, CONLEY, CONSIDINE, EMERSON, GOYKE, HAYWOOD,
8	8	JOERS, OHNSTAD, ORTIZ-VELEZ, PALMERI, RATCLIFF, SHANKLAND, SHELTON,
9	9	SNODGRASS, STUBBS, SUBECK and SINICKI. Referred to Committee on Labor,
10	10	Regulatory Reform, Veterans and Military Affairs.
11	11	AN ACT to renumber and amend 103.465; to amend 103.465 (title); and to
12	12	create 103.465 (1m) and 103.465 (3) and (4) of the statutes; relating to:
13	13	covenants not to compete in employment contracts.
14	14	Analysis by the Legislative Reference Bureau
15	15	Under current law, a restrictive covenant in an employment contract that
16	16	prohibits an assistant, servant, or agent from competing with his or her employer or
17	17	principal during the term of the employment or agency, or after the termination of
18	18	the employment or agency, within a specified territory and during a specified time
19	19	is lawful and enforceable if the restrictions imposed are reasonably necessary for the
20	20	protection of the employer or principal. Such a covenant that imposes an
21	21	unreasonable restraint is illegal, void, and unenforceable even as to any part of the
22	22	covenant or performance that would be a reasonable restraint.
23	23	This bill makes most such covenants illegal, void, and unenforceable after the
24	24	termination of employment or agency. A nondisclosure agreement related to
25	25	personal information of the the employer or principal or the customers of the
26	26	employer or principal or a restrictive covenant prohibiting the unauthorized use by
27	27	a former employee or agent of a customer list or intellectual property owned or
28	28	licensed by the employer or principal is not illegal, void, or unenforceable under the
29	29	bill.
30	30	The people of the state of Wisconsin, represented in senate and assembly, do
31	31	enact as follows:
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36	36	SECTION 1 SENATE BILL 566
37	37	SECTION 1. 103.465 (title) of the statutes is amended to read:
38	38	103.465 (title) Restrictive covenants Covenants not to compete in
39	39	employment contracts.
40	40	SECTION 2. 103.465 of the statutes is renumbered 103.465 (2) and amended to
41	41	read:
42	42	103.465 (2) COVENANTS IN EMPLOYMENT CONTRACTS NOT TO COMPETE WHILE
43	43	EMPLOYED. A covenant by an assistant, servant, employee, or agent not to compete
44	44	with his or her employer or principal during the term of the employment or agency,
45	45	or after the termination of that employment or agency, within a specified territory
46	46	and during a specified time is lawful and enforceable only if the restrictions imposed
47	47	are reasonably necessary for the protection of the employer or principal. Any
48	48	covenant, described in this section, imposing subsection, that imposes an
49	49	unreasonable restraint on trade is illegal, void, and unenforceable even as to any part
50	50	of the covenant or performance that would be a reasonable restraint on trade.
51	51	SECTION 3. 103.465 (1m) of the statutes is created to read:
52	52	103.465 (1m) DEFINITIONS. In this section:
53	53	(a) “Copyright” means a work of authorship, including writings, music, and
54	54	works of art, that has been tangibly expressed and that is protected by the federal
55	55	Copyright Act, 17 USC 101 to 1332, or common law.
56	56	(b) “Customer list” means any information about a customer that is not
57	57	available to a competitor of an employer or principal, including personal information
58	58	and past purchases of goods or services from the employer or principal.
59	59	(c) “Intellectual property” means copyrights, patents, trademarks, trade
60	60	secrets, and any other type of commonly recognized intellectual property.
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87	87	SECTION 3
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89	89	(d) “Nondisclosure agreement” means a written agreement or provision that
90	90	prohibits the disclosure of personal information about an employer or principal or a
91	91	customer of an employer or principal.
92	92	(e) “Patent” means a right to an invention protected under 35 USC 251 to 329.
93	93	(f) “Trade secret” has the meaning given in s. 134.90 (1) (c).
94	94	SECTION 4. 103.465 (3) and (4) of the statutes are created to read:
95	95	103.465 (3) COVENANTS IN EMPLOYMENT CONTRACTS NOT TO COMPETE AFTER
96	96	TERMINATION OF EMPLOYMENT OR AGENCY. A covenant by an assistant, servant,
97	97	employee, or agent not to compete with his or her employer or principal after the
98	98	termination of the employment or agency imposes an unreasonable restraint on
99	99	trade and is illegal, void, and unenforceable even as to any part of the covenant that
100	100	would be a reasonable restraint on trade. This subsection does not apply to a
101	101	nondisclosure agreement or to a covenant not to compete that is limited to
102	102	prohibiting or restricting the unauthorized use of a customer list or intellectual
103	103	property owned or licensed by the employer or principal.
104	104	(4) NOTICE POSTED. Each employer and principal shall post, in one or more
105	105	conspicuous places where notices to assistants, servants, employees, and agents are
106	106	customarily posted, and in a conspicuous place on the employer's or principal's
107	107	website, if the employer or principal maintains a website, a notice in a form approved
108	108	by the department that explains that covenants not to compete after termination of
109	109	employment or agency, subject to the exceptions in sub. (3), are an unreasonable
110	110	restraint on trade and are illegal, void, and unenforceable.
111	111	SECTION 5.0Initial applicability.
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136	136	SECTION 5 SENATE BILL 566
137	137	(1) COVENANT NOT TO COMPETE IN EMPLOYMENT CONTRACTS. This act first applies
138	138	to a covenant not to compete that is entered into, extended, modified, or renewed on
139	139	the effective date of this subsection.
140	140	(END)
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