Employee Restrictive Covenant Agreement
Cover Terms
The terms below are incorporated into and form part of this agreement.
| Employer | [Legal name of the entity that employs the employee] | ||||||||
| Employee | [Full legal name of the employee] | ||||||||
| Employee Title / Position | |||||||||
| Effective Date | [Effective date of this agreement — the date the last party signs. It anchors the duration presumptions stated in Cover Terms.] | ||||||||
| Governing Law | Wisconsin | ||||||||
| Confidentiality | |||||||||
| Trade Secrets Duration | Perpetual | ||||||||
| Other Confidential Information Duration | 24 months | ||||||||
| Employee Non-Solicitation | |||||||||
| Duration | 24 monthsMarket benchmark HideShow
Why this selected default?Why is this the selected default?24 months matches the modal employee non-solicit term observed in benchmarked, publicly-filed employee agreements; 12 months is the common lighter alternative. The Act sets no express duration presumption for the no-hire category, so the uniquely-essential scope limit does the primary category work; counsel should size the term to the workforce interest actually protected. Showing 3 representative examples. Company names link directly to the underlying SEC filing.
Showing 3 representative examples. Company names link directly to the underlying SEC filing.
Showing 3 representative examples. Company names link directly to the underlying SEC filing.
Showing 3 representative examples. Company names link directly to the underlying SEC filing. See all 3 examples in the complete benchmark →Showing 1 representative example. Company names link directly to the underlying SEC filing. See all 1 example in the complete benchmark →Showing 1 representative example. Company names link directly to the underlying SEC filing. See all 1 example in the complete benchmark →Showing 1 representative example. Company names link directly to the underlying SEC filing. See all 1 example in the complete benchmark →Showing 1 representative example. Company names link directly to the underlying SEC filing. See all 1 example in the complete benchmark →Showing 1 representative example. Company names link directly to the underlying SEC filing. See all 1 example in the complete benchmark → | ||||||||
| Covered Employee Lookback | 12 months | ||||||||
| Customer Non-Solicitation | |||||||||
| Duration | 12 monthsState-law basis 12 monthsReference only — not part of this agreement. 12 months sits well inside the presumptively reasonable window for a current-customer non-solicit: eighteen months, or for as long as post-separation consideration is paid, whichever is greater. Counsel may extend toward eighteen months, or longer while post-separation consideration is paid, where the interest supports it. | ||||||||
| Covered Customer Lookback | 12 months | ||||||||
| No Business with Covered Customers | |||||||||
| Duration | 12 monthsState-law basis 12 monthsReference only — not part of this agreement. 12 months sits within the current-customer window. Because non-dealing has no category of its own, it is drawn to fit inside the current-customer non-solicit exception, and its duration tracks that category's presumption. | ||||||||
| Non-Investment | |||||||||
| Duration | 12 months | ||||||||
| Passive Public Holdings Threshold | five percentMarket benchmark HideShow
Why this selected default?Why is this the selected default?Five percent of any class of publicly traded securities is the modal passive-investment carve-out threshold observed in benchmarked, publicly-filed employee agreements that include the carve-out (lower 1-3 percent thresholds are the common tighter alternatives). In a state whose law voids restraints except as it specifically provides, a clause forbidding ordinary public shares is gratuitous overbreadth serving no listed interest. Showing 3 representative examples. Company names link directly to the underlying SEC filing.
Showing 3 representative examples. Company names link directly to the underlying SEC filing.
Showing 3 representative examples. Company names link directly to the underlying SEC filing.
Showing 3 representative examples. Company names link directly to the underlying SEC filing. See all 6 examples in the complete benchmark →Showing 1 representative example. Company names link directly to the underlying SEC filing. See all 1 example in the complete benchmark →Showing 1 representative example. Company names link directly to the underlying SEC filing. See all 1 example in the complete benchmark → | ||||||||
| Non-Disparagement | |||||||||
| Duration | 24 months |
Standard Terms
1. Defined Terms
“Competitive Business” means the business activities described in Cover Terms under Competitive Business.
“Confidential Information” means Trade Secrets and other non-public information that is genuinely competitively sensitive to Employer's business — including customer and pricing information, business processes, technical data, and strategic plans — that Employer takes reasonable measures to keep confidential. Confidential Information does not include ordinary, non-secret business information, information generally known in the trade, or information that becomes public through no fault of Employee.
“Covered Customers” means customers, vendors, referral sources, and business partners with whom Employee had material contact or for whom Employee had responsibility during the 12 months before termination of employment.
“Covered Employees” means employees with whom Employee actually worked, whom Employee supervised, or about whom Employee gained material information during the 12 months before termination of employment. This term does not reach every employee of Employer.
“Passive Public Holdings” means ownership of securities of a publicly traded company representing less than five percent of any class of such company's securities, and interests in diversified mutual funds, index funds, and exchange-traded funds that may hold securities of a Competitive Business.
“Protected Interests” means Employer's Trade Secrets and genuinely competitively sensitive Confidential Information, its relationships with Covered Customers, and its stable working relationships with Covered Employees.
“Restricted Period” means the duration specified in Cover Terms for each covenant, beginning on the date Employee's employment with Employer ends for any reason. The Restricted Period for each covenant is a fixed and definite period and is not extended by any period of alleged breach or the pendency of any dispute.
“Restricted Territory” means the geographic area described in Cover Terms under Restricted Territory.
“Solicit” means to directly or indirectly initiate contact with, approach, induce, or encourage any person or entity for the purpose of diverting business away from Employer, but does not include responding to general advertisements or unsolicited inquiries not initiated by Employee.
“Trade Secrets” means information that qualifies as a trade secret under applicable law.
2. Recitals and Protectable Interests
Employer and Employee acknowledge that the restrictive covenants protect Employer's Protected Interests and are reasonable in duration, territory, and scope. Employer would not provide Employee with access to its Protected Interests absent the protections in this agreement. Each restrictive covenant is separate and independently enforceable.
Drafting Note The five-factor reasonableness test
Every post-employment restraint in the agreement — non-compete, customer or employee non-solicit, no-business-with-customers, and non-investment alike — stands or falls on the same five prerequisites, because § 103.465 makes a covenant enforceable only if the restrictions imposed are reasonably necessary for the protection of the employer . A restraint must be necessary to a protectable interest, reasonable in time, reasonable in territory, no harsher than that protection requires, and not contrary to public policy; a failure on any single factor is fatal, and because § 103.465 voids an unreasonable restraint in full, a covenant that reaches even slightly too far is struck rather than narrowed .
3. Timing, Consideration, and Right to Consult Counsel
Employee has had an opportunity to consult with an attorney of Employee's choosing before entering into this agreement. Where Employee signs this agreement at or before the start of employment, the offer of employment and the access to Employer's Protected Interests it entails are the consideration for the restrictive covenants. Where Employee signs this agreement during employment, Employer's forbearance from exercising its right to terminate Employee's at-will employment is consideration for the restrictive covenants; the parties intend that forbearance to be genuine. Employee acknowledges receiving one or more of these benefits in exchange for the restrictive covenants in this agreement. This agreement is effective as of the Effective Date listed in Cover Terms.
4. Confidential Information and Trade Secret Protection
Employee must treat all Confidential Information as strictly confidential. Employee must not use or disclose Confidential Information except as required to perform authorized job duties or with Employer's prior written consent. Employee's obligations regarding Trade Secrets continue for the Trade Secrets Duration stated in Cover Terms, for as long as the information remains a Trade Secret. Employee's obligations regarding other Confidential Information continue for the Other Confidential Information Duration stated in Cover Terms.
Drafting Note Confidentiality scope
A confidentiality or non-disclosure clause that sweeps in ordinary, non-secret business information rather than actual trade secrets and competitively sensitive information is judged as a restraint of trade. Diamond Assets held an overbroad confidentiality covenant unenforceable under § 103.465 on a motion to dismiss, so a catch-all NDA falls the same way an overbroad non-compete does — regardless of the evidence the employer might later offer .
Drafting Note Trade-secret safeguards
A protection program resting on a non-compete alone is only as durable as the covenant, while trade-secret safeguards — access controls, confidentiality designations, and exit procedures — do not depend on § 103.465. Wis. Stat. § 134.90 protects qualifying secrets regardless of a covenant's survival, but only where the information meets the statutory definition and was kept reasonably secret, so a program that neglects those safeguards leaves the secrets exposed if the covenant is void .
5. Permitted Disclosures and Protected Conduct
Nothing in this agreement prohibits Employee from: (a) reporting possible violations of law to any government agency, including the Securities and Exchange Commission, the Equal Employment Opportunity Commission, the Occupational Safety and Health Administration, or any other federal, state, or local agency; (b) making disclosures protected under whistleblower provisions of any law; (c) discussing wages, hours, or other terms and conditions of employment as protected by applicable law, including Section 7 of the National Labor Relations Act; (d) testifying truthfully in legal proceedings or making disclosures required by law, subpoena, or court order; or (e) filing a sealed complaint in court using Confidential Information without liability. Pursuant to the Defend Trade Secrets Act (18 U.S.C. § 1833(b)), Employee may not be held criminally or civilly liable for disclosing a trade secret in confidence to a government official or attorney solely for the purpose of reporting or investigating a suspected violation of law, or in a sealed court filing.
6. Return, Deletion, and Certification of Company Property
Upon termination of employment, Employee must promptly return to Employer all documents, devices, files, credentials, and other materials containing or relating to Confidential Information. Where permitted, Employee must permanently delete electronic copies of Confidential Information from personal devices and accounts. Employee must certify compliance with this section in writing upon Employer's request.
7. Non-Solicitation of Employees
During the Restricted Period, Employee must not Solicit, recruit, hire, or attempt to hire any Covered Employee. This covenant applies only to Covered Employees — colleagues with whom Employee actually worked, whom Employee supervised, or about whom Employee gained material information during the covered lookback period — and does not reach Employer's workforce generally. This restriction does not prohibit Employee from providing a professional reference upon request or from hiring a person who responds to a general advertisement not directed specifically at Employer's employees.
Drafting Note Employee non-solicitation
An employee non-solicitation clause reaching the whole workforce, rather than the colleagues the departing worker actually worked with or supervised, is exposed on its face. Manitowoc v. Lanning treats employee non-solicitation as a § 103.465 restraint and voided an all-employees clause as overbroad on its face — and because § 103.465 voids in full, the covenant disappears rather than shrinking to a lawful core, taking any fee award built on it along .
8. Non-Solicitation of Customers, Vendors, Referral Sources, and Business Partners
During the Restricted Period, Employee must not Solicit the business of any Covered Customer. This covenant is drawn to protect Employer's relationships with the specific customers, referral sources, and business partners Employee served or learned protected information about, and not Employer's customer base generally.
9. No Business with Covered Customers
During the Restricted Period, Employee must not accept, service, or do business with any Covered Customer, regardless of who initiates contact. This restriction applies only to Covered Customers during the Restricted Period.
10. Non-Investment
During the Restricted Period, Employee must not acquire or hold any active ownership interest in, serve as a director, officer, manager, or advisor to, or have material economic participation in any Competitive Business. Passive Public Holdings are permitted.
11. Non-Disparagement
During the Restricted Period specified in Cover Terms for Non-Disparagement, Employee must not make statements that are intended to or reasonably likely to disparage Employer, its officers, directors, employees, products, or services. This section does not restrict Employee from making truthful statements in legal proceedings, providing truthful testimony, making disclosures to government agencies, discussing wages, hours, or other terms and conditions of employment, or otherwise exercising rights protected by law.
12. No Restriction on a Lawyer's Right to Practice
Notwithstanding any other provision of this agreement, no restrictive covenant in this agreement restricts the right of a licensed lawyer to practice law after the termination of the relationship.
Drafting Note The lawyer-practice bar
A covenant that would restrict a licensed lawyer's right to practice after the relationship ends does not hold in Wisconsin. SCR 20:5.6 bars a lawyer from participating in offering or making an agreement that restricts the right to practice after termination — with exceptions only for retirement-benefit agreements and restrictions settling a client controversy — and reaches the offering firm as well as the signing lawyer; no level of compensation and no showing of reasonableness cures a violation, so a practice restraint against a lawyer is void whatever consideration supports it .
13. Covenants Arising from a Sale of Business
This agreement applies only to covenants Employee gives in Employee's capacity as an employee. It does not govern a covenant given separately in connection with a sale of a business or equity transaction.
Drafting Note Sale-of-business covenants
The legal framework follows the substance of the deal, not the caption on the document. A covenant given as part of a genuine business sale or equity transaction — one separable from the employment relationship and not imposed through the employer's hiring leverage — is judged under the common-law rule of reason, which allows partial enforcement, while an employee covenant is locked into § 103.465's all-or-nothing rule; a sale-related covenant routed through an employment agreement risks recharacterization as an employee covenant and the harsher rule that comes with it .
14. No Conflicting Obligations
Employee represents that performing duties for Employer and complying with this agreement does not conflict with any prior agreement, court order, or legal obligation binding on Employee. Employee must promptly disclose to Employer any potential conflict that arises during employment.
15. Notice to Future Employers and Other Third Parties
Employer may disclose the existence and terms of this agreement to any prospective employer or business associate of Employee if Employer has a reasonable belief that Employee may breach an enforceable covenant in this agreement. Employee consents to this disclosure.
16. No Extension of the Restricted Period During Breach
The Restricted Period for each covenant is a fixed and definite period. It is not extended, tolled, or lengthened by any period during which Employee is alleged to be in breach or violation of a covenant, or by the pendency of any dispute or litigation.
Drafting Note Extension during breach
A clause extending a Wisconsin covenant for periods of the employee's breach makes the duration indefinite rather than fixed. H&R Block v. Swenson held that such an extension voids the entire clause under § 103.465, and because Wisconsin courts will not blue-pencil it back to a fixed term, the tolling language destroys the covenant it was meant to protect; a pending-litigation tolling clause, while untested, raises the same definiteness problem .
17. Remedies
Employee acknowledges that a breach of an enforceable covenant in this agreement may cause Employer irreparable harm for which money damages would be inadequate. Employer may seek injunctive or other equitable relief, in addition to any other remedies available at law, to enforce an enforceable covenant.
18. Survival and Expiration of Each Covenant
Each restrictive covenant survives termination of Employee's employment for its Restricted Period and expires on its own schedule. Obligations under the Confidential Information and Trade Secret Protection section survive to the extent, and for as long as, the information remains a Trade Secret. All other provisions survive to the extent necessary to enforce rights that arose during employment.
19. Assignment and Successors
Employee may not assign this agreement or any rights or obligations under it. Employer may assign this agreement to any affiliate, successor, or acquirer of all or substantially all of Employer's business or assets. Any assignee takes each covenant subject to the same limits, conditions, and enforceability as apply between Employer and Employee. This agreement is binding on and inures to the benefit of the parties and their respective heirs, successors, and permitted assigns.
20. Governing Law, Venue, and Dispute Process
This agreement is governed by the law of the Governing Law state listed in Cover Terms. For employment performed in Wisconsin, the parties select Wisconsin law. Disputes will be resolved in the courts of the Governing Law state, subject to non-waivable rights under applicable law.
21. Entire Agreement, Amendment, Waiver, and Electronic Signatures
This agreement constitutes the entire agreement between the parties regarding its subject matter and supersedes all prior agreements, understandings, and negotiations on this subject. Any amendment must be in writing, signed by both parties, and supported by any consideration required by applicable law. A party's failure to enforce any provision does not waive that party's right to enforce it later. This agreement may be executed in counterparts, including by electronic signature, each of which is an original.
Signatures
By signing this agreement, each party acknowledges and agrees to the restrictive covenant obligations above. Employee confirms having read and understood each provision, including the Cover Terms.
Employer
Employer: [Legal name of the entity that employs the employee]
Signature:
Signatory Name: [Full name of the authorized signatory signing for the employer]
Title: [Title of the authorized signatory signing for the employer]
Date:
Employee
Signature:
Print Name: [Full legal name of the employee]
Date: