This case examines the divisibility of clauses in a non-compete agreement between a product distributor and a sales representative.
Some background: In 2006, Eugene Dal Pra voluntarily left his employment with Star Direct, a distributor of products to convenience stores. He then began his own business distributing general merchandise under the name "Distributing Plus."
Dal Pra’s employment contract with Star included two provisions, which have become the focus of this petition for review. The Court of Appeals refers to these two clauses as "the customer clause" and "the business clause."
The circuit court held that both clauses were vague, overbroad, not reasonably necessary to protect Star, and that they were indivisible. The Court of Appeals affirmed, and concluded that the entire agreement was unenforceable because the clauses were indivisible under Mutual Service Casualty Insurance Co. v. Brass, 2001 WI App 92, 242 Wis. 2d 733, 625 N.W.2d 648.
Star contends the customer clause is reasonable and was written narrowly enough to preclude Dal Pra from soliciting only current customers, or those customers he had dealt with on behalf of Star within the last year. In addition, the company argues each clause is separate and divisible.
Dal Pra argues the restrictive covenants in the agreement were not necessary for Star’s protection, and that the restrictive covenants are indivisible. Many products sold in convenience stores are not sold by Star, and by prohibiting him from working in a substantially similar business, he would be restricted from selling items that do not compete with Star, Dal Pra contends.
A decision by the Supreme Court could help determine if the Brass case properly sets out the law governing divisibility of clauses in non-compete agreements under Wis. Stat. § 103.465. From Rock County.
See Tough Times for Non-Compete Agreements by Andrew Clarkowski and Robert Procter, Axley Brynelson, LLP, May 5, 2003
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