AB903: Bill Text

LRB-3972/1

MIM:amn

2023 - 2024 LEGISLATURE

2023 Assembly BILL 903

January 4, 2024 - Introduced by Representatives J. Anderson, C. Anderson, Bare, Emerson, Madison and Sinicki, cosponsored by Senator L. Johnson. Referred to Committee on Labor and Integrated Employment.

AB903,1,3 An Act to renumber and amend 103.465; to amend 103.465 (title); and to create 103.465 (2) and (3) of the statutes; relating to: prohibitions on nondisparagement clauses in employment contracts.

Analysis by the Legislative Reference Bureau

Under current law, a covenant by an employee or agent not to compete with his or her employer or principal during the term of the employment or agency, or after the termination of that employment or agency, within a specified territory and during a specified time (covenant not to compete) is lawful and enforceable if the restrictions imposed are reasonably necessary for the protection of the employer or principal. Currently, any covenant not to compete that imposes an unreasonable restraint on an employee or agent is illegal, void, and unenforceable even as to any part of the covenant that would be a reasonable restraint.

This bill provides that a provision in an employment contract that prohibits an employee or agent from disparaging an employer or principal after the termination of the employment or agency is illegal, void, and unenforceable.

The people of the state of Wisconsin, represented in senate and assembly, do enact as follows:

AB903,1 Section 1. 103.465 (title) of the statutes is amended to read:

AB903,2,2 103.465 (title) Restrictive covenants in employment contracts; prohibitions.

AB903,2 Section 2. 103.465 of the statutes is renumbered 103.465 (1) and amended to read:

AB903,2,13 103.465 (1) Covenants in employment contracts not to compete. A covenant by an assistant, servant, employee, or agent not to compete with his or her employer or principal during the term of the employment or agency, or after the termination of that employment or agency, within a specified territory and during a specified time is lawful and enforceable only if the restrictions imposed are reasonably necessary for the protection of the employer or principal. Any covenant, described in this section, imposing subsection, that imposes an unreasonable restraint on trade is illegal, void, and unenforceable even as to any part of the covenant or performance that would be a reasonable restraint on trade.

AB903,3 Section 3. 103.465 (2) and (3) of the statutes are created to read:

AB903,2,20 103.465 (2) Nondisparagement provisions in employment contract after termination of employment or agency prohibited. A provision in an employment contract that requires an assistant, servant, employee, or agent not to disparage his or her former employer or former principal in writing or in speech after the termination of the employment or agency imposes an unreasonable restraint on trade and is illegal, void, and unenforceable.

AB903,3,3 (3) Notice posted. Each employer and principal shall post, in one or more conspicuous places where notices to assistants, servants, employees, and agents are customarily posted, and in a conspicuous place on the employer's or principal's website if the employer or principal maintains a website, a notice in a form approved by the department that explains that an employment contract provision that prohibits a former employee or agent from disparaging the employer or principal after termination of employment or agency is an unreasonable restraint on trade and is illegal, void, and unenforceable.

AB903,4 Section 4. Initial applicability.

AB903,3,7 (1) Nondisparagement provision in employment contracts. This act first applies to a nondisparagement provision in an employment contract that is entered into, extended, modified, or renewed on the effective date of this subsection.

AB903,3,8 (End)