For over 50 years, Wisconsin has been deciding cases related to covenants not to compete in working relationships under Wisconsin Stat. § 103.465. On July 14, 2009, in an opinion authored by Justice Michael J. Gableman, Wisconsin’s Supreme Court changed the way that statute will work, much to the benefit of employers. Here’s what they did.
Continue Reading...A recent Court of Appeals case, Town of Cross Plains v. Kitt's Korner, Inc. 2008AP546 illustrates the risk involved in opening a new business on the assumption that a possible change in zoning will not effect its operation if the business is already up and running.
In that case, an adult entertainment business was opened on a parcel which, at the time it commenced operation, was zoned in such a fashion that such a business was not a prohibited use. The owner of the business naturally incurred costs in the start up of the business. The owner was aware of the fact that an ordinance amending the zoning to prohibit such a business on the land in question was coming up for vote, but apparently believed that his expenditure, and the actual operation of the business for a period of time prior to any adoption of the proposed ordinance, would create a situation in which his business would be "grandfathered in" even if the amendment to the zoning ordinance was adopted.
Although the law does recognize that, in certain fairly rare circumstances, expenditure of funds based on a reasonable reliance that zoning will not be changed can create vested rights which will not be impacted by zoning changes, the Court of Appeals held in this case that there could be no reasonable reliance because the owner was aware of the pending vote on the ordinance amendment, but chose open the business regardless. Expenditures made were made despite the fact that the owner new that zoning prohibiting the business was contemplated and could be adopted.
When opening a business, it would be prudent not only to review current zoning, but also to inquire whether any modifications in zoning are being considered.
In a recent decision, Harvot v. Solo Cup Company, 2009 WI 85, the Wisconsin Supreme Court determined there is no right to a jury trial under Wisconsin's Family and Medical Leave Act.
The Court rejected the argument that a jury trial should be provided in Wisconsin because it is available under the Federal Act, noting that the Wisconsin Act is different in several respects from the Federal version. It noted that the Wisconsin Act does not expressly provide for jury trials, and held that such a right cannot be implied. Finally, it determined where no jury trial is provided for by statute, a constitutional right to a jury trial exists in Wisconsin only as to causes of action recognized in the common law prior to adoption of the Wisconsin Constitution in 1848.
Employers faced with a civil action for damages based on Wisconsin's Family and Medical Leave Act therefore will not have to face a jury, which may be more influenced by emotion and sympathy for a plaintiff than a trial judge.
In a recent decision, Star Direct, Inc. v. Del Pra www.wisbar.org/res/sup/2007ap000617.htm the Wisconsin Supreme Court determined that where an employment contract contains restrictive covenants which address separate specific interests of employers, the fact that one of those covenants is overbroad and therefore illegal does not necessarily render other covenants unenforceable.
The contract in that case contained provisions restricting the employee from engaging in business similar to that of the employer, restricting him from contacting past and present customers of the employer, and requiring the employee to hold certain information derived from the employer confidential. The court determined that the covenant restricting the employee from engaging in similar business was overbroad, but that the other covenants addressed separate legitimate concerns of the employer which would remain enforceable. Therefore, those covenants are divisible from the invalid covenant.
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Minority and Majority Shareholders Beware – Lessons from Notz v. Everett Smith Group, Ltd. 2009 WI 30
In the recent Wisconsin Supreme Court case Notz v. Everett Smith Group, Ltd. 2009 WI 30, there are important lessons for both majority and minority shareholders.
Lessons for Minority Shareholders. If you are a minority shareholder in a corporation and you believe that the majority has breached its fiduciary duty to you and caused you harm by foregoing a corporate opportunity, make sure that you allege and can demonstrate with evidence that it harmed you specifically and be able to allege and show that you were not just harmed the same as all other shareholders. Failure to allege and show specific harm will result in failure or dismissal of your claim, according to the Wisconsin Supreme court. Specifically, the court held that “the loss of a corporate opportunity and the sale of a subsidiary with high growth potential - - caused harm primarily to the corporation . . .” Notz at para. 38, and therefore the court affirmed the dismissal of Notz’s (the minority shareholder) claim for breach of fiduciary duty against the board of directors and majority shareholder.
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Twitter is a relatively new social networking site that allows its users to communicate using "tweets" that are no more than 140 characters. When I first joined Twitter, I had a hard time understanding how such communication could benefit the users. Now, I am not only convinced it is something that is really huge and is here to stay, I am slowly finding people who have seen the light on it and can point the direction. One such person is Rush Nigut, an Iowa attorney. Rush has an excellent article on his Iowa business blog entitled "More on Twitter in the Workplace." I'd highly recommend it not only for lawyers, but for everyone, since its impact will be felt by us all. Follow Rush on Twitter.
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