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Fields Found., Ltd. v. Christensen - 103 Wis. 2d 465, 309 N.W.2d 125 (Ct. App. 1981)

Rule:

An employer is not entitled to be protected against legitimate and ordinary competition of the type that a stranger could give. There must be some additional special facts and circumstances which render the restrictive covenant reasonably necessary for the protection of the employer's business. Thus, to enforce a restraint, the employee must present a substantial risk either to the employer's relationships with his customers or with respect to confidential business information. An employee's covenant not to compete is ordinarily unenforceable, except to prevent the use of trade secrets or customer lists or unless the employee's services are of a unique character. The reasonableness of a covenant not to compete "involves the totality of the circumstances.

Facts:

Plaintiff Fields Foundation, Ltd. (Foundation) operated an abortion clinic, where defendant, Dr. Dennis D. Christensen, was employed as the medical director for two years. The covenant restricts the doctor from engaging in a medical practice or business which is similar to the type conducted at the Foundation within 50 miles of the Wisconsin state capitol in Madison for two years after termination of his employment. Plaintiff Foundation commenced an action to enforce a covenant not to compete, for damages for breach of the employment contract, and for defamation. The trial court enjoined the doctor from performing certain-related activities but refused to enforce the provision for liquidated damages.

Issue:

Was the restrictive non-compete covenant in the parties' employment contract enforceable?

Answer:

Yes.

Conclusion:

To enforce a restraint, the employee must present a substantial risk either to the employer's relationships with his customers or with respect to confidential business information. The court held that the doctor's short and generally one-time contacts with patients would not make him a more formidable competitor than another doctor, but the doctor's identification with the foundation's considerable goodwill by those referring business to it provided him with significant advantages.

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