Wisconsin Lawyer
Vol. 82, No. 11, November 2009

In Drafting

• To maximize the prospect of producing divisible restrictive covenants, each restriction should be self-standing, without textual cross-references. Don’t use a separate paragraph that contains the definitions of terms used in multiple restrictive covenants or a single paragraph that details the consequences of breaches of multiple restrictive covenants.
• Carefully assess a decision to include past customers within a customer nonsolicitation clause if the provision will apply outside the route sales context.
• Notwithstanding Star Direct, consider explicitly limiting the universe of customers covered by a nonsolicitation covenant to those with whom the employee has had recent contact or about whom the employee recently obtained confidential information.
• In defining recent contact or acquisition of knowledge, one year is safe; more time is uncertain.
• Emphasize special knowledge of the employer’s business and customer needs and preferences.

Evaluating, Challenging, Defending

• Analyze the divisibility of multiple restrictive covenants by applying the textual cross-reference test.
• Do not assume that a nonsolicitation clause that includes past customers is unenforceable. But examine the reasonableness of the universe of past customers included within the restriction.
• Consider the nature of the employee’s job when assessing the reasonableness of a nonsolicitation provision, generally, and as applied to past customers, specifically.
• Consider the implications of Star Direct on restrictions regarding solicitation of prospective customers.
• Consider the significance of silent precedent.
• Consider whether a challenge can be characterized as distorting the right and fair reading of the restrictive covenant.
• Assume that the ripple effect of Star Direct will make courts far less open to restrictive covenant challenges. 

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