Runzheimer International, Ltd. v. David Friedlen, 862 N.W.2d 879

David Friedlen, an at-will employee of Runzheimer for >15 years, was required in 2009 to sign a restrictive covenant (noncompete/confidentiality/non-solicit) or be fired; he signed after a two-week period.
Friedlen remained employed for 29 months after signing; Runzheimer terminated him in 2011. He then took a job with competitor CRS.
Runzheimer sued Friedlen and CRS for breach of the covenant, trade-secret/confidential-information claims, and tortious interference; Friedlen/CRS moved for summary judgment arguing lack of consideration.
The circuit court granted summary judgment for defendants on most claims, holding Runzheimer’s promise not to fire was illusory and thus not consideration; Runzheimer appealed and the court of appeals certified the question to the Wisconsin Supreme Court.
Wisconsin Supreme Court held that an employer’s forbearance of its right to terminate an at-will employee constitutes lawful consideration for a restrictive covenant; theoretical immediate firing does not render the promise illusory because remedies (fraudulent inducement, good faith and fair dealing, or rescission) can prevent enforcement in bad-faith cases.
The Supreme Court reversed the circuit court and remanded for further proceedings; it did not decide the covenant’s reasonableness.

Issue	Plaintiff's Argument (Runzheimer)	Defendant's Argument (Friedlen)	Held
Whether an employer’s promise not to fire an existing at-will employee in exchange for signing a restrictive covenant is lawful consideration	Forbearance of the right to fire is consideration; treating new and existing at-will hires differently is unwarranted	Promise not to fire is illusory because employer retains unfettered right to terminate at any time; additional consideration is required	Forbearance of the right to terminate an at-will employee is lawful consideration; contract-formation doctrines (fraud, good faith) protect against bad-faith immediate terminations
Whether the potential for immediate post-signing termination renders the promise illusory or automatically voids the covenant	Theoretical ability to fire does not negate the forbearance already given; illusory-ness is not present	Immediate firing after obtaining covenant proves lack of meaningful promise; employee protection requires extra promised consideration	The possibility of immediate firing does not automatically make the promise illusory; remedies (fraud, breach of good faith, rescission) apply where employer acts deceitfully

Wis. Ice & Coal Co. v. Lueth, 213 Wis. 42 (1933) (employer-imposed covenant at hiring supported by consideration despite at-will nature)
NBZ, Inc. v. Pilarski, 185 Wis. 2d 827 (Ct. App. 1994) (no consideration where employer neither conditioned continued employment nor promised anything when existing at-will employee signed covenant)
Star Direct, Inc. v. Dal Pra, 319 Wis. 2d 274 (2009) (upheld covenant required of new hires; cited NBZ for principle that existing employees need additional consideration)
Ferraro v. Koelsch, 124 Wis. 2d 154 (1985) (promise-for-promise and employee continued work can constitute consideration)
First Wis. Nat'l Bank v. Oby, 52 Wis. 2d 1 (1971) (definition of consideration as detriment to promisee or benefit to promisor)
Curtis 1000, Inc. v. Suess, 24 F.3d 941 (7th Cir. 1994) (discusses risk of employer firing and rehiring to circumvent consideration rules)