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Law School Case Brief

Chuck Wagon Catering, Inc. v. Raduege - 88 Wis. 2d 740, 277 N.W.2d 787 (1979)

Rule:

There are five basic requirements necessary to enforcement of a restrictive covenant pursuant to Wis. Stat. § 103.465 (1975). They are: (1) The agreement must be necessary for the protection of the employer or principal; (2) it must provide a reasonable time period; (3) it must cover a reasonable territory; (4) it must not be unreasonable as to the employee; and (5) it must not be unreasonable as to the general public. 

Facts:

Warren Raduege leased a lunch truck and the customer route was established by Chuck Wagon Catering, Inc. (Chuck Wagon) for several years. A contract provision stated that the route and identity of the customer stops were Chuck Wagon’s trade secret. A restrictive covenant stated that Raduege agreed that for one year following termination of the contract he would refrain from catering to customers on the route. Chuck Wagon filed an action for breach of a restrictive covenant in a leasing agreement. The lower court ruled in favor of Raduege. Chuck Wagon appealed.

Issue:

Was the restrictive covenant prohibiting Raduege from soliciting former customers valid?

Answer:

Yes

Conclusion:

The court found that although the list of customer stops was not a trade secret, the restrictive covenant was reasonable and valid. The court stated it was reasonable for Chuck Wagon to protect its customer contacts by prohibiting Raduege from soliciting former customers until new drivers had an opportunity to become acquainted with customers. The court also found the duration and territorial limitations of the covenant to be reasonable. The court reversed the judgment and held that liquidated damages, provided for in the contract, were to be awarded.

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