## Facts

- Dennis C. Streiff worked as an insurance agent under a standardized “Career Agent’s Agreement” from 1967 until termination effective April 1, 1980.
- The agreement promised “extended earnings” (termination benefits) totaling $33,830.45, payable only if Streiff complied with all contractual terms after termination.
- The contract included (1) a one-year, territorial noncompetition restriction and (2) an additional clause conditioning extended earnings on refraining from specified competitive conduct beyond the territorial and temporal limits of the one-year restriction.
- After termination, Streiff publicly stated he would continue in the insurance business and had arranged to place insurance with other companies.
- Streiff contacted existing clients (about 1,264 policyholders) and encouraged them to buy insurance through him with other insurers.
- American Family concluded Streiff violated the post-termination restrictions and refused to pay any extended earnings.
- Streiff sued for the extended earnings, arguing the forfeiture-for-competition restrictions were invalid under Wis. Stat. § 103.465.
- The circuit court granted summary judgment to American Family; the court of appeals affirmed.

## Issues

1. Whether a provision requiring forfeiture of post-termination “extended earnings” based on competitive conduct is a restraint of trade governed by Wis. Stat. § 103.465.
2. Whether the agreement’s forfeiture-based competitive restrictions were unreasonable in time, territory, or scope and therefore void under Wis. Stat. § 103.465.
3. If overbroad, whether the court may enforce a narrowed version of the restriction or must void the restraint in its entirety.

## Decision

- The Wisconsin Supreme Court reversed the court of appeals and the summary judgment entered for American Family.
- The court held that the forfeiture provisions conditioning extended earnings on post-termination noncompetition were unenforceable under Wis. Stat. § 103.465.
- The case was remanded for further proceedings consistent with the invalidity of the restrictive forfeiture scheme.

## Legal Principles

- Wis. Stat. § 103.465 regulates restraints of trade in employment and permits enforcement only if restrictions are reasonably necessary to protect the employer and reasonable as to time, territory, and scope.
- Section 103.465 applies not only to express covenants not to compete, but also to forfeiture-for-competition clauses that functionally deter competition by conditioning substantial post-employment benefits on noncompetition.
- A restriction that extends materially beyond reasonable temporal or geographic limits, or beyond the employer’s protectable interests, is an unreasonable restraint and is void.
- Wisconsin applies an all-or-nothing rule to overbroad restraints covered by § 103.465; courts generally will not rewrite the parties’ restriction to make it reasonable.

## Conclusion

The Wisconsin Supreme Court treated extended-earnings forfeiture provisions triggered by competition as restrictive covenants subject to Wis. Stat. § 103.465 and held the overbroad restrictions void, reversing summary judgment for the insurer and remanding for further proceedings.


Streiff v. Am. Fam. Mut. Ins. Co., 348 N.W.2d 505 (Wis. 1984)