Rollins Burdick Hunter, Inc. v. Hamilton - 101 Wis. 2d 460, 304 N.W.2d 752 (1981)

Rule:

A per se rule offends the notion that the validity of a restrictive covenant is to be established by examination of the particular circumstances which surround it. Whether the determination of the reasonableness of a noncompetition agreement is characterized as a question of law or one of fact, it still remains one which can be made only upon a consideration of factual matters.

Facts:

Petitioner insurance agency, Rollins Burdick Hunter of Wisconsin, Inc., hired respondent employees, and had them sign noncompetition agreements. The agreements restricted respondents from soliciting business from petitioner's clients for two years. Respondents voluntarily terminated their employment and petitioner filed suit seeking an injunction against respondents to prohibit them from violating the terms of the noncompetition agreement. Respondents moved to dismiss the action for failure to state a claim upon which relief could be granted. The lower court granted respondents' motion to dismiss and held that petitioner's request for injunction was unreasonable because the prohibition on solicitation of petitioner's customers extended beyond those clients actually serviced by respondents. Petitioner sought review of the decision. 

Issue:

Were the noncompetition agreements unreasonable as a matter of law, thereby justifying the grant of respondents’ motion to dismiss petitioner’s action? 

Answer:

No.

Conclusion:

The court reversed and remanded the case for further proceedings on the issue of whether the noncompetition agreements were unreasonable because this determination depended upon the totality of facts and circumstances, including the nature and character of information necessary to conduct petitioner's business and whether the restraint hampered respondents' ability to pursue their livelihood.