885 N.W.2d 798
Wis. Ct. App.2016Background
- Manitowoc and Lanning entered a 2008 agreement including a two-year nonsolicitation of employees (NSE) restraint.
- Lanning left Manitowoc in January 2010 to join a direct competitor (SANY) of Manitowoc.
- After leaving, Lanning allegedly contacted and recruited Manitowoc employees for SANY through various means.
- Manitowoc sued for breach of the NSE, and the circuit court granted summary judgment for Manitowoc and awarded fees and costs.
- The court held the NSE was enforceable under Wis. Stat. § 103.465, and Manitowoc was entitled to damages and fees.
- On appeal, the supreme court held that § 103.465 governs the NSE and that the NSE is unenforceable under the statute, reversing the circuit court and remanding for entry of summary judgment in Lanning’s favor.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether Wis. Stat. § 103.465 governs the NSE provision | Manitowoc argues § 103.465 applies to NSE as a trade restraint | Lanning concedes framework but argues NSE may not be governed or enforceable under § 103.465 | § 103.465 applies to the NSE provision |
| Whether the NSE provision is enforceable under § 103.465 | NSE is narrowly tailored to protect Manitowoc’s legitimate interests | NSE is overbroad and not justified by any protectable interest | NSE is unenforceable under § 103.465; the circuit court’s judgment is reversed and remanded for entry of summary judgment in Lanning’s favor |
Key Cases Cited
- Star Direct, Inc. v. Dal Pra, 319 Wis. 2d 274 (Wis. 2009) (reasonableness framework for covenants under § 103.465)
- Behnke v. Hertz Corp., 235 N.W.2d 690 (Wis. 1974) (covenants in restraint of trade require close scrutiny)
- Tatge v. Chambers & Owen, Inc., 579 N.W.2d 217 (Wis. 1998) (§ 103.465 applies to trade restraints ensuring reasonableness)
- Lakeside Oil Co. v. Slutsky, 98 N.W.2d 415 (Wis. 1959) (protectable interest required for enforceability)
- Brass v. Mutual Serv. Cas. Ins. Co., 625 N.W.2d 648 (Wis. 2001) (overbreadth invalidates restrictive covenants)
