## Facts

- Runzheimer International, Ltd., a business consulting company, employed David Friedlen as an at-will employee for more than 15 years.
- Runzheimer required existing employees to sign a restrictive covenant or face termination.
- Friedlen was given two weeks to review the covenant and was told to sign or be fired.
- Friedlen signed the restrictive covenant and continued working for Runzheimer for more than two years.
- Runzheimer terminated Friedlen in 2011.
- After termination, Friedlen began working for Corporate Reimbursement Services, Inc. (CRS), a direct competitor.
- Runzheimer sued Friedlen and CRS, alleging breach of the restrictive covenant, including a 24-month post-employment noncompetition restriction.

## Issues

1. Whether an employer’s forbearance from immediately terminating an existing at-will employee constitutes lawful consideration for the employee’s restrictive covenant.
2. Whether the restrictive covenant should be treated as unsupported by consideration because the employer retained the right to terminate the employee at any time.
3. Whether the case should be remanded for a separate determination of the covenant’s reasonableness under Wisconsin law.

## Decision

- The Wisconsin Supreme Court reversed the circuit court’s summary judgment for Friedlen and CRS and remanded.
- The court held that an employer’s forbearance in exercising its right to terminate an at-will employee is lawful consideration for the employee’s agreement to a restrictive covenant.
- The court declined to decide whether the covenant’s specific terms were reasonable, leaving that question for further proceedings on remand.

## Legal Principles

- Consideration may consist of a benefit to the promisor or a detriment to the promisee; forbearance of a legal right is valid consideration.
- An employer’s decision not to exercise its legal right to immediately discharge an at-will employee, in exchange for the employee’s assent to a restrictive covenant, supplies consideration.
- The mere fact that an at-will employer retains the ability to terminate employment later does not negate consideration.
- Concerns about bad-faith inducement or immediate termination are addressed through other doctrines and remedies (e.g., fraudulent inducement and the duty of good faith and fair dealing).
- Courts generally assess the existence, not the adequacy, of consideration.
- Even when supported by consideration, a restrictive covenant’s enforceability remains subject to a separate reasonableness review under Wis. Stat. § 103.465.

## Conclusion

The Wisconsin Supreme Court held that continued at-will employment conditioned on signing a restrictive covenant is supported by lawful consideration because the employer forbears from immediate termination; the case was remanded to determine whether the covenant’s terms were reasonable and enforceable.


Runzheimer Int’l, Ltd. v. Friedlen, 362 Wis. 2d 100, 862 N.W.2d 879 (Wis. 2015)