Title: Runzheimer Int’l, Ltd. v. Friedlen

State: wisconsin

Issuer: Wisconsin Supreme Court

Document:

2015 WI 45 
 
SUPREME COURT OF WISCONSIN 
 
 
 
 
 
CASE NO.: 
2013AP1392 
COMPLETE TITLE: 
Runzheimer International, Ltd., 
          Plaintiff-Appellant, 
     v. 
David Friedlen and Corporate Reimbursement 
Services, Inc., 
          Defendants-Respondents.   
 
 
 
 
 
ON CERTIFICATION FROM THE COURT OF APPEALS 
 
 
OPINION FILED: 
April 30, 2015 
SUBMITTED ON BRIEFS: 
        
ORAL ARGUMENT: 
October 1, 2014 
 
 
SOURCE OF APPEAL: 
 
 
COURT: 
Circuit 
 
COUNTY: 
Milwaukee 
 
JUDGE: 
William W. Brash 
 
 
 
JUSTICES: 
 
 
CONCURRED: 
ABRAHAMSON, C.J., concurs. (Opinion Filed.) 
 
DISSENTED: 
      
 
NOT PARTICIPATING:          
 
 
 
ATTORNEYS: 
 
For the plaintiff-appellant, there were briefs by Michael 
B. Apfeld, Michael D. Huitnik, Erin M. Cook, and Godfrey & Kahn, 
S.C., Milwaukee. Oral argument by Michael B. Apfeld. 
 
For the defendants-respondents (in the court of appeals), 
there was a brief filed Daniel D. Barker, Tony H. McGrath, and 
Jeffrey M. Rosin, and Constangy, Brooks and Smith LLP, Madison. 
Oral argument by Jeffrey M. Rosin. 
 
An amicus curiae brief was filed by James A. Buchen and 
Andrew C. Cook on behalf of Wisconsin Manufacturers and Commerce 
and the Wisconsin Civil Justice Council, Inc.  
 
 
 
2015 WI 45
NOTICE 
This opinion is subject to further 
editing and modification.  The final 
version will appear in the bound 
volume of the official reports.   
No.  2013AP1392   
(L.C. No. 
2012CV859) 
STATE OF WISCONSIN  
 
 
   : 
IN SUPREME COURT 
 
 
Runzheimer International, Ltd., 
 
          Plaintiff-Appellant, 
 
     v. 
 
David Friedlen and Corporate Reimbursement 
Services, Inc., 
 
          Defendants-Respondents. 
 
 
 
FILED 
 
APR 30, 2015 
 
Diane M. Fremgen 
Clerk of Supreme Court 
 
 
 
 
APPEAL from a final judgment of the Circuit Court for 
Milwaukee County, William W. Brash, III, Judge.  Reversed and 
cause remanded. 
 
¶1 
DAVID T. PROSSER, J.   This case is before the court 
on certification by the court of appeals pursuant to Wis. Stat. 
§ (Rule) 809.61 (2011-12).1  It requires us to examine the 
enforceability of a restrictive covenant signed by an existing 
at-will employee. 
                                                 
1 All subsequent references to the Wisconsin Statutes are to 
the 2011-12 version unless otherwise indicated. 
No. 
  2013AP1392 
2 
 
¶2 
David Friedlen (Friedlen) had worked for Runzheimer 
International, Ltd. (Runzheimer) for more than fifteen years 
when Runzheimer required all of its employees, including 
Friedlen, to sign restrictive covenants.  Runzheimer gave 
Friedlen two weeks to review the covenant, after which Friedlen 
was required to sign it or be fired.  Friedlen chose to sign the 
covenant and continued to work for Runzheimer for more than two 
years before being terminated in 2011.  Friedlen then sought 
employment at Corporate Reimbursement Services (CRS), one of 
Runzheimer's competitors. 
¶3 
Runzheimer sued both Friedlen and CRS, alleging that 
Friedlen's employment at CRS constituted a breach of the 
restrictive covenant.  Friedlen and CRS moved for summary 
judgment on Runzheimer's claims on grounds that the covenant was 
unenforceable because it lacked consideration.  The Milwaukee 
County Circuit Court2 initially denied the motion.  The parties 
then conducted additional discovery, Runzheimer filed an amended 
complaint, and Friedlen and CRS again moved for summary 
judgment.  This time the court granted summary judgment against 
three of Runzheimer's four claims.  The court ruled that 
Runzheimer's promise not to fire Friedlen immediately if he 
signed the restrictive covenant was an illusory promise and did 
not constitute consideration to support the agreement because 
Runzheimer retained "the unfettered right to discharge Friedlen 
                                                 
2 The Honorable William W. Brash, III, presiding. 
No. 
  2013AP1392 
3 
 
at any time, including seconds after Friedlen signed the 
Agreement." 
¶4 
Runzheimer 
appealed, 
and 
the 
Wisconsin 
Court 
of 
Appeals certified the case to this court.  In its certification, 
the court explained that Wisconsin law fails to adequately 
address whether an employer's forbearance of its right to 
terminate an existing at-will employee in exchange for the 
employee agreeing to a restrictive covenant constitutes lawful 
consideration.3 
¶5 
We hold that an employer's forbearance in exercising 
its right to terminate an at-will employee constitutes lawful 
consideration for signing a restrictive covenant.  Although, 
theoretically, 
an 
employer 
could 
terminate 
an 
employee's 
employment shortly after having the employee sign a restrictive 
covenant, the employee would then be protected by other contract 
formation principles such as fraudulent inducement or good faith 
and fair dealing, so that the restrictive covenant could not be 
enforced. 
¶6 
In this case, the circuit court made no determination 
as to the reasonableness of the covenant's terms.  Because the 
record and arguments before us are undeveloped on the issue of 
reasonableness, we decline to address it.  Accordingly, we 
reverse the decision of the circuit court and remand the cause 
                                                 
3 For purposes of clarity, we use the term "lawful 
consideration" 
instead 
of 
"sufficient 
consideration" 
to 
differentiate the existence of consideration from the adequacy 
of consideration. 
No. 
  2013AP1392 
4 
 
to that court for further proceedings consistent with this 
opinion. 
I. FACTUAL BACKGROUND AND PROCEDURAL HISTORY 
¶7 
Friedlen was an at-will employee at Runzheimer, a 
Wisconsin corporation that provides "a range of employee 
mobility services relating to business vehicles, relocation, 
travel 
management, 
corporate 
aircraft, 
and 
virtual 
office 
programs."  Runzheimer hired Friedlen in 1993 as a Business 
Development Consultant.  Friedlen worked primarily in this role 
for Runzheimer, except from 2001 to 2006 when he worked in 
different capacities.  Friedlen participated in Runzheimer's 
Incentive Plan each year, irrespective of his position, starting 
with the year he was hired.  Runzheimer's Incentive Plan 
consisted of bonuses based on a percentage of sales in the 
employee's territory.  Runzheimer reviewed the Plan annually and 
adjusted it for sales targets. 
¶8 
In 2009 Runzheimer required all employees to sign a 
restrictive 
covenant. 
 
Runzheimer's 
Director 
of 
Business 
Development, Michael W. Bassi, permitted Friedlen to review the 
restrictive covenant for two weeks but told him that if he did 
not sign the agreement by the end of that time, his employment 
would be terminated.  Friedlen's participation in Runzheimer's 
Incentive Program also was contingent on his signing the 
restrictive covenant. 
¶9 
The restrictive covenant included the following terms: 
1. Confidentiality Obligations.  . . .  After the 
end, for whatever reason, of Employee's [Friedlen's] 
No. 
  2013AP1392 
5 
 
employment with the Company [Runzheimer], Employee 
will not directly or indirectly use or disclose any 
Trade Secret of the Company. For a period of 24 months 
following the end, for whatever reason, of Employee's 
employment 
with 
the 
Company, 
Employee 
will 
not 
directly 
or 
indirectly 
use 
or 
disclose 
any 
Confidential Information of the Company. Nothing in 
this Agreement shall prevent Employee, after the end 
of employment with the Company, from using general 
skills and knowledge gained while employed by the 
Company. 
. . . .  
4. Post–Employment Non–Solicitation of Restricted 
Customers.  For 24 months following the end, for 
whatever reason, of Employee's employment with the 
Company, Employee agrees not to directly or indirectly 
sell or attempt to sell to any Restricted Customers 
any goods, products or services of the type or 
substantially similar to the type Employee sold, 
marketed, produced or supported on behalf of the 
Company during the 12 months prior to the end of the 
Employee's employment with the Company. 
5. 
Post–Employment 
Restricted 
Services 
Obligation.  For 24 months following the end, for 
whatever reason, of Employee's employment with the 
Company, Employee agrees not to directly or indirectly 
provide to any Competitor Restricted Services or 
advice 
or 
counsel 
concerning 
the 
provision 
of 
Restricted Services in the geographic area in which, 
during the 12 months prior to the end of the 
Employee's 
employment 
with 
the 
Company, 
Employee 
provided services or assisted any Company employee or 
agent in the provision of services to or on behalf of 
the Company. 
¶10 Friedlen signed the restrictive covenant on June 15, 
2009.  He received more than $20,000 in 2009 from Runzheimer's 
Incentive 
Plan 
in 
addition 
to 
his 
regular 
compensation.  
Runzheimer employed Friedlen for 29 months after he signed the 
No. 
  2013AP1392 
6 
 
restrictive covenant.  On November 16, 2011, however, Runzheimer 
terminated Friedlen's employment.4 
¶11 Following his termination, Friedlen reached out to 
CRS.  CRS is a competitor of Runzheimer, as both corporations 
administer services for employers to utilize Internal Revenue 
Service guidelines to determine how employers can reimburse 
employees without tax consequences for the business use of the 
employees' personal vehicles.  Friedlen retained independent 
counsel to review the restrictive covenant and determine its 
enforceability.  Friedlen's independent counsel opined that the 
restrictive covenant was not enforceable.  CRS then offered 
Friedlen a position, which he accepted on December 14, 2011.  He 
began work for CRS on January 2, 2012. 
¶12 On January 18, 2012, Runzheimer sent Friedlen a letter 
demanding 
his 
compliance 
with 
the 
restrictive 
covenant.  
Friedlen ignored Runzheimer's demand because he believed the 
restrictive 
covenant 
was 
unenforceable. 
 
Consequently, 
Runzheimer filed a complaint against Friedlen and CRS on January 
20, 2012, alleging: (1) Friedlen breached the restrictive 
covenant, 
(2) 
Friedlen 
misappropriated 
Runzheimer's 
trade 
secrets, and (3) CRS tortiously interfered with the restrictive 
covenant. 
                                                 
4 The reason for this termination is not at issue; Friedlen 
concedes that Runzheimer's termination of his employment was 
legal. 
No. 
  2013AP1392 
7 
 
¶13 On February 16, Friedlen and CRS filed a motion 
seeking dismissal (or, alternatively, summary judgment) of 
Runzheimer's claims.  They argued that the restrictive covenant 
was 
unenforceable 
because 
it 
lacked 
consideration. 
 
The 
Milwaukee County Circuit Court, William W. Brash, III, Judge, 
denied the motion, with some hesitation, because of material 
questions of fact about consideration. 
¶14 On November 5, 2012, after conducting additional 
discovery, Runzheimer filed an amended complaint that included 
an 
additional 
claim 
of 
common 
law 
misappropriation 
of 
confidential information against both Friedlen and CRS and a 
claim 
of 
tortious 
interference 
with 
prospective 
business 
relationship, also against both defendants.  On November 15, 
Friedlen and CRS again moved for summary judgment on all claims. 
¶15 On May 14, 2013, the circuit court granted the 
defendants' motion on all claims except the misappropriation 
claim.  In explaining its ruling on Runzheimer's breach of 
contract claim, the court stated, "Runzheimer made an illusory 
promise of continued employment to Friedlen.  Such a promise 
cannot constitute consideration for the Agreement.  The fact 
that Friedlen continued his employment with Runzheimer for years 
after the Agreement does not change the analysis." 
¶16 The court determined that Wisconsin law does not 
adequately address whether continued employment of an existing 
at-will employee is lawful consideration supporting enforcement 
of a restrictive covenant.  Nevertheless, the court stated that 
its ruling was consistent with the Wisconsin Court of Appeals' 
No. 
  2013AP1392 
8 
 
analysis of employment-at-will situations, as well as this 
court's opinions on consideration in restrictive covenants. 
¶17 All parties stipulated to dismissal of the remaining 
claims against CRS and Friedlen with prejudice, and an order for 
dismissal was filed on June 4, 2013.  Runzheimer then appealed 
on June 19.  The court of appeals thereafter certified the case 
for our review, asking us whether "consideration in addition to 
continued employment [is] required to support a covenant not to 
compete entered into by an existing at-will employee."  We 
accepted the certification on June 12, 2014. 
II. DISCUSSION 
A. Standard of Review 
¶18 This case requires us to review the circuit court's 
decision granting summary judgment.  "We review a decision on a 
motion for summary judgment independently, employing the same 
methodology as the circuit court."  Estate of Genrich v. OHIC 
Ins. Co., 2009 WI 67, ¶10, 318 Wis. 2d 553, 769 N.W.2d 481.  
Restrictive covenants are contracts, the interpretation of which 
is a matter of law that we review de novo.  Star Direct, Inc. v. 
Dal Pra, 2009 WI 76, ¶18, 319 Wis. 2d 274, 767 N.W.2d 898. 
¶19 "Wisconsin 
courts 
treat 
contracts 
concerning 
employment 
like 
any 
other 
contract," 
including 
agreements 
between employers and at-will employees formed subsequent to 
hiring 
that 
supplant 
or 
modify 
the 
original 
employment 
relationship.  Tinder v. Pinkerton Sec., 305 F.3d 728, 734 (7th 
Cir. 2002) (citing Ferraro v. Koelsch, 124 Wis. 2d 154, 368 
N.W.2d 666 (1985)).  A covenant not to compete is such a 
No. 
  2013AP1392 
9 
 
contract.  NBZ, Inc. v. Pilarski, 185 Wis. 2d 827, 837, 520 
N.W.2d 93 (Ct. App. 1994) (citing Behnke v. Hertz Corp., 70 
Wis. 2d 818, 820, 235 N.W.2d 690 (1975)). 
¶20 The elements of an enforceable contract are offer, 
acceptance, and consideration.  Rosecky v. Schissel, 2013 WI 66, 
¶57, 349 Wis. 2d 84, 833 N.W.2d 634.  "The existence of an offer 
and 
acceptance 
are 
mutual 
expressions 
of 
assent, 
and 
consideration is evidence of the intent to be bound to the 
contract."  NBZ, 185 Wis. 2d at 837 (citing 1 Arthur Linton 
Corbin, Corbin on Contracts §§ 11, 112 (1963)). 
¶21 We have defined consideration as "a detriment incurred 
by the promisee or a benefit received by the promisor at the 
request of the promisor . . . .  Neither the benefit to the 
promisor nor the detriment to the promisee need be actual."  See 
First Wis. Nat'l Bank v. Oby, 52 Wis. 2d 1, 5, 188 N.W.2d 454 
(1971) (quoting 1 Samuel Williston & Walter H.E. Jaeger, A 
Treatise on the Law of Contracts §§ 102, 102A (3d ed. 1957)); 
see also Hardscrabble Ski Area v. First Nat'l Bank, 42 
Wis. 2d 334, 344, 166 N.W.2d 191 (1969).  Additionally, "a 
promise for a promise, or the exchange of promises, will 
constitute 
consideration 
to 
support 
any 
contract 
of 
[a] 
bilateral nature."  Ferraro, 124 Wis. 2d at 164 (citations 
omitted). 
B. Legal Background 
¶22 We have previously addressed whether an employer's 
requirement that an at-will employee sign a restrictive covenant 
as part of the hiring contract constitutes lawful consideration.  
No. 
  2013AP1392 
10 
 
See Wis. Ice & Coal Co. v. Lueth, 213 Wis. 42, 43, 250 N.W. 819 
(1933).5  In Lueth, we explained that such an agreement does not 
fail for lack of lawful consideration even though the employer 
is free to terminate the employment relationship at any time.  
Id. at 44. 
¶23 Runzheimer would have us rule that a similar agreement 
between an employer and an existing at-will employee does not 
lack lawful consideration either.  Runzheimer argues that 
existing 
at-will 
employees 
who 
are 
required 
to 
sign 
a 
restrictive covenant should not be treated differently from new 
at-will employees because in both cases the employer is 
promising employment in exchange for the employee's signing of 
the covenant.  In addition, both the employer and employee are 
as free to terminate the employment relationship at the start of 
employment as they are several years later.  Accordingly, 
Runzheimer argues, a promise of continued employment that an 
employer makes to an existing at-will employee in exchange for 
the employee's signing of a restrictive covenant constitutes 
lawful consideration. 
¶24 Friedlen differentiates the circumstances surrounding 
the creation of an at-will employment relationship from the 
circumstances 
surrounding 
an 
existing 
at-will 
employment 
relationship. 
 
He 
argues 
that 
at 
the 
beginning 
of 
the 
relationship, both parties experience numerous detriments and 
                                                 
5 See also Eureka Laundry Co. v. Long, 146 Wis. 205, 131 
N.W. 412 (1911), for extended discussion of the issue. 
No. 
  2013AP1392 
11 
 
benefits.  For example, at the beginning of the relationship, 
employers 
expend 
resources 
on 
workers' 
compensation, 
unemployment insurance, and compliance with state and federal 
employment laws.  Employers also provide a new employee with 
"access 
to 
the 
employer's 
facility, 
business 
information, 
experience, training and compensation."  Friedlen argues that 
this exchange of benefits to the employee and detriments to the 
employer at the beginning of the relationship supports a 
restrictive covenant with lawful consideration. 
¶25 However, Friedlen argues, there is not a similar 
exchange of benefits or detriments when an employer presents a 
restrictive covenant to an existing at-will employee in return 
for continued employment.  Friedlen contends that a promise of 
continued employment does not alter the situation of either the 
employer or employee, except that the employee is now subject to 
a restrictive covenant.  Thus, Friedlen concludes, a restrictive 
covenant lacks lawful consideration unless the employer offers 
the employee something in addition to promising continued 
employment.6 
¶26 Runzheimer appears to minimize the vulnerable position 
of an employee who has worked for the same employer for a number 
of years.  The employee may develop specialized skills and 
                                                 
6 Some 
examples 
of 
what 
may 
suffice 
as 
additional 
consideration in states that require it include "increased 
wages, a promotion, a bonus, a fixed term of employment, or 
perhaps access to protected information."  Labriola v. Pollard 
Group, Inc., 100 P.3d 791, 794 (Wash. 2004) (en banc). 
No. 
  2013AP1392 
12 
 
knowledge that would transfer smoothly to an equivalent position 
for 
another 
employer——except 
for 
the 
newly 
established 
restrictive covenant.  These skills and knowledge may not 
transfer so easily when a new position involves a different line 
of work.  Moreover, the employee may have grown much older and 
acquired family responsibilities not present when the employee 
was hired.  The inability to transfer easily to an equivalent 
job may reduce the employee's bargaining power to negotiate a 
raise or bonus with the initial employer and may prevent the 
employee from terminating the employment relationship on his own 
timetable.  By contrast, an employee at the beginning of the 
employment relationship is likely to have more freedom to find 
alternative employment because he or she may not be burdened 
with some of these restraints. 
¶27 Given these different circumstances, we decline to 
rely exclusively on our holding in Lueth to conclude that an 
employer's forbearance of its right to terminate an at-will 
employee constitutes lawful consideration.  Instead, we believe 
a deeper analysis is required. 
C. NBZ and Star Direct 
¶28 Two cases closely related to this case are NBZ and 
Star Direct.  Both NBZ and Star Direct involved restrictive 
covenants for at-will employees.  Runzheimer utilizes these two 
cases to argue that neither this court nor the Wisconsin Court 
of Appeals has ruled that forbearance of the right to terminate 
an at-will employee does not constitute lawful consideration for 
a restrictive covenant.  Friedlen, on the other hand, argues 
No. 
  2013AP1392 
13 
 
that NBZ is not dispositive of the issue but that our holding in 
Star Direct provides a ruling in his favor.  The parties' 
conflicting reliance on these two cases suggests that an 
explanation of their holdings is necessary to clarify Wisconsin 
law. 
¶29 In NBZ, the court of appeals addressed whether lawful 
consideration exists if an employer does not condition an 
existing at-will employee's continued employment on signing a 
restrictive covenant.  NBZ, 185 Wis. 2d at 833.  Studio 890, a 
beauty salon in Elm Grove, Wisconsin, required its employee, 
Paula Pilarski, to sign a covenant not to compete while she was 
in training.  Id. at 833-34.  About one year later, Pilarski 
left the salon and began working for one of Studio 890's 
competitors. Id. at 834. 
¶30 Studio 
890 
sued 
Pilarski, 
seeking 
a 
permanent 
injunction which would require her to terminate her employment 
at the competitor's salon.  Id.  The court of appeals first 
concluded that a covenant not to compete must be supported by 
consideration, as it is subject to both common law contract 
principles and the Wisconsin Statutes.7  Id. at 836. 
                                                 
7 Wisconsin Stat. § 103.465 addresses restrictive covenants 
in employment contracts: 
A covenant by an assistant, servant or agent not 
to compete with his or her employer or principal 
during the term of the employment or agency, or after 
the termination of that employment or agency, within a 
specified territory and during a specified time is 
lawful 
and 
enforceable 
only 
if 
the 
restrictions 
imposed are reasonably necessary for the protection of 
(continued) 
No. 
  2013AP1392 
14 
 
¶31 The court next addressed whether the covenant not to 
compete was supported by consideration, as Pilarski signed the 
covenant after her employment began.  Id. at 838.  The court 
held that the covenant was not supported by consideration 
because "the evidence [did] not show that Studio 890 conditioned 
employment or promised to do anything in exchange for Pilarski's 
signing the covenant."  Id. at 839. 
¶32 The holding in NBZ was limited to a determination that 
a restrictive covenant between an employer and an existing at-
will employee lacks consideration when the employer neither 
conditions the employee's continued employment on signing the 
covenant nor promises to do anything else in exchange for 
signing the covenant.  This ruling did not affirmatively 
determine whether lawful consideration would exist if an 
employer expressly conditioned the existing at-will employee's 
continued 
employment 
on 
his 
or 
her 
signing 
a 
proffered 
restrictive covenant. 
¶33 In Star Direct, this court addressed whether an 
employer can require new at-will employees to sign restrictive 
covenants when the employer does not require the same from 
existing at-will employees.  Eugene Dal Pra was a route salesman 
working for CB Distributors before Star Direct purchased his 
                                                                                                                                                             
the employer or principal. Any covenant, described in 
this subsection, imposing an unreasonable restraint is 
illegal, void and unenforceable even as to any part of 
the covenant or performance that would be a reasonable 
restraint. 
No. 
  2013AP1392 
15 
 
route.  Star Direct, 319 Wis. 2d 274, ¶7.  Star Direct, wishing 
to retain the business on Dal Pra's route, offered to hire him 
on the condition that he sign a covenant not to compete.  Id., 
¶¶7-8.  After working for Star Direct for about four years, Dal 
Pra quit and started his own competing company.  Id., ¶12.  Star 
Direct sought injunctive relief to prevent Dal Pra from 
violating his covenant not to compete.  Id., ¶13. 
¶34 Dal Pra argued that the covenant was unreasonable and 
unnecessary because Star Direct required only its new employees, 
not its existing employees, to sign covenants not to compete.  
Id., ¶49.  In response to Dal Pra's allegation, the owner of 
Star Direct explained that "there was the obvious risk that the 
current employees would not sign them if asked to, or would 
leave and begin competing with Star Direct."  Id., ¶50. 
¶35 We 
disagreed 
with 
Dal 
Pra 
that 
Star 
Direct's 
inconsistency amounted to unreasonableness or was unnecessary, 
as Star Direct's hiring policies following the acquisition of CB 
Distributors' routes remained consistent and proved that Star 
Direct 
legitimately 
feared 
the 
possibility 
that 
the 
new 
employees would later pose competitive risks.  Id., ¶51.  In 
reaching our conclusion, we cited NBZ for the principle that 
"employers may not compel their existing employees to sign 
restrictive covenants without additional consideration."  Id., 
¶50 (citing NBZ, 185 Wis. 2d at 837-39).  However, the Star 
Direct 
decision 
did 
not 
explain 
what 
would 
constitute 
"additional consideration." 
No. 
  2013AP1392 
16 
 
¶36 Based on the quoted statement in Star Direct, Friedlen 
would like us to conclude that we have already addressed whether 
forbearance of the right to terminate an at-will employee is 
lawful consideration.  According to Friedlen, our ruling in Star 
Direct demonstrates that an employer's promise of continued 
employment is not additional consideration.  The circuit court 
ultimately read Star Direct as saying that an employer's promise 
of continued employment meant nothing because an at-will 
employee can be terminated at will. 
¶37 Friedlen's reliance on these cases is flawed.  NBZ 
tells us that no consideration exists when there is no evidence 
to show that the employer conditioned employment or promised to 
do anything in exchange for the employee's signing the covenant.  
NBZ, 185 Wis. 2d at 839.  Star Direct simply does not address 
whether an employer's promise not to terminate the employment 
relationship 
satisfies 
the 
"additional 
consideration" 
requirement it describes.  Therefore, Friedlen's contention that 
we have already ruled on this issue is incorrect. 
D. Application of Legal Principles 
¶38 Jurisdictions throughout the country are split on 
whether forbearance of the right to terminate an at-will 
employee is lawful consideration for an employee's promise to 
forego certain rights.  However, the jurisdictions that hold 
that a promise not to fire is not lawful consideration for a 
covenant not to compete represent the "distinct minority."  
Simko, Inc. v. Graymar Co., 464 A.2d 1104, 1107 (Md. Ct. Spec. 
App. 1983). 
No. 
  2013AP1392 
17 
 
¶39 Jurisdictions that rule forbearance of the right to 
terminate an at-will employee is lawful consideration, on the 
other hand, typically reason that employees are obtaining the 
expectation of continued employment, which is not worthless or 
illusory.8  The American Law Institute embraces this view.  See 
Restatement (Third) of Employment Law, Proposed Final Draft 
§ 8.06 cmt. e (2014) ("Continuing employment of an at-will 
employee is generally sufficient consideration to support the 
enforcement of an otherwise valid restrictive covenant."). 
¶40 In Wisconsin, "[f]orbearance in exercising a legal 
right is valid consideration . . . ."  Lovett v. Mt. Senario 
                                                 
8 See, e.g., Lucht's Concrete Pumping, Inc. v. Horner, 255 
P.3d 1058, 1059-60 (Colo. 2011) (en banc); Summits 7, Inc. v. 
Kelly, 886 A.2d 365, ¶20 (Vt. 2005) ("In either case, the 
employee is, in effect, agreeing not to compete for a given 
period following employment in exchange for either initial or 
continued employment."); Lake Land Emp't Grp., LLC v. Columber, 
804 N.E.2d 27, ¶19 (Ohio 2004) ("Where an employer makes such a 
proposal by presenting his employee with a noncompetition 
agreement and the employee assents to it, thereby accepting 
continued employment on new terms, consideration supporting the 
noncompetition agreement exists."); Camco, Inc. v. Baker, 936 
P.2d 829, 832 n.7 (Nev. 1997) (per curiam) ("Courts have 
concluded that in an at-will employment context 'continued 
employment' is, as a practical matter, equivalent to the 
employer's 
'forbearance 
to 
discharge'; 
many 
courts 
have 
concluded that the consideration is equally valid phrased as a 
benefit to the employee or a legal detriment to the employer."); 
Ackerman v. Kimball Int'l, Inc., 652 N.E.2d 507, 509 (Ind. 
1995); Hogan v. Bergen Brunswig Corp., 378 A.2d 1164, 1167 (N.J. 
App. Div. 1977) (per curiam); Sherman v. Pfefferkorn, 135 N.E. 
568, 569 (Mass. 1922).  Contra Labriola, 100 P.3d at 793; Poole 
v. Incentives Unlimited, Inc., 548 S.E.2d 207, 209 (S.C. 2001); 
Freeman v. Duluth Clinic, Ltd., 334 N.W.2d 626, 630 (Minn. 
1983); Kadis v. Britt, 29 S.E.2d 543 (N.C. 1944). 
No. 
  2013AP1392 
18 
 
Coll., Inc., 154 Wis. 2d 831, 837, 454 N.W.2d 356 (Ct. App. 
1990) (citing Hammel v. Ziegler Fin. Corp., 113 Wis. 2d 73, 81, 
334 N.W.2d 913 (Ct. App. 1983)).  Accepting this principle, the 
question remains: is promising not to fire an existing at-will 
employee in exchange for the employee immediately signing a 
restrictive 
covenant 
a 
valid 
example 
of 
"forbearance 
in 
exercising a legal right?"  If so, then the restrictive covenant 
Friedlen signed is supported by lawful consideration. 
¶41 Wisconsin has long recognized the employment-at-will 
doctrine.  See Prentiss v. Ledyard, 28 Wis. 131, 133 (1871).  
Under the employment-at-will doctrine, an employer has the right 
to "discharge an employee 'for good cause, for no cause, or even 
for cause morally wrong, without being thereby guilty of legal 
wrong.'"  Brockmeyer v. Dun & Bradstreet, 113 Wis. 2d 561, 567, 
335 N.W.2d 834 (1983) (citation omitted). 
¶42 Wisconsin has an exception to the at-will doctrine 
that provides employees with a cause of action "for wrongful 
discharge when the discharge is contrary to a fundamental and 
well-defined public policy as evidenced by existing law."  Id. 
at 573.  A "narrowly circumscribed public policy exception" to 
the at-will doctrine is in the interest of the public, 
employers, and employees because it simultaneously protects the 
mobility of the workforce while recognizing employers' need to 
adapt to changing economic conditions.  Id. at 574. 
¶43 One way an employer may respond to changing economic 
conditions is to reduce the risk that former employees will 
compete and take business from the company.  Many employers 
No. 
  2013AP1392 
19 
 
require employees to sign restrictive covenants to ameliorate 
this risk.  Restrictive covenants are enforceable in Wisconsin 
as long as the restrictions are reasonable.  See Wis. Stat. 
§ 103.465. 
¶44 Thus, if Friedlen had not signed the restrictive 
covenant and Runzheimer had fired him as a result, the firing 
would not have fallen under Wisconsin's public policy exception.  
However, Runzheimer did not exercise its right to terminate 
Friedlen's employment.  Instead, Runzheimer exchanged its right 
to fire Friedlen for Friedlen's promise not to compete with 
Runzheimer upon his leaving the company. 
¶45 Friedlen argues that Runzheimer's promise not to fire 
him was illusory.  A contract is illusory when it is 
"'conditional on some fact or event that is wholly under the 
promisor's control and his [or her] bringing it about is left 
wholly to his [or her] own will and discretion . . . .'"  Metro. 
Ventures, LLC v. GEA Assocs., 2006 WI 71, ¶33, 291 Wis. 2d 393, 
717 N.W.2d 58 (alteration in original) (quoting Nodolf v. 
Nelson, 103 Wis. 2d 656, 660, 309 N.W.2d 397 (Ct. App. 1981)).  
Put another way, "[t]he fundamental element of [an illusory] 
promise is a promisor's expression of intention that the 
promisor's future conduct shall be in accord with the present 
expression, irrespective of what the promisor's will may be when 
No. 
  2013AP1392 
20 
 
the time for performance arrives."9  1 Joseph M. Perillo, Corbin 
on Contracts § 1.17, at 47 (Rev. ed. 1993) (emphasis added). 
¶46 Runzheimer's promise not to fire Friedlen if he signed 
the covenant was not illusory because it was not a promise 
implicating Runzheimer's future discretionary conduct.  Rather, 
Runzheimer's promise was that it would not fire Friedlen at that 
time 
and 
for 
that 
reason. 
 
Thus, 
Runzheimer 
performed 
immediately when it forbore its legal right to fire Friedlen at 
that time.10 
¶47 An at-will employee has just as much power to 
terminate the employment relationship as the employer does.  
Runzheimer promised not to exercise its legal right to end the 
employment relationship in exchange for Friedlen signing the 
                                                 
9 The prototypical example of an illusory promise is 
described in Corbin on Contracts: "X guarantees payment of P's 
note in return for C's written promise to forbear from suing P 
as long as C wishes to forbear.  In this case C's words may 
create the illusion of a promise, but in fact, C has made no 
promise."  1 Joseph M. Perillo, Corbin on Contracts § 1.17, at 
47 (Rev. ed. 1993). 
10 This differs from the example in Corbin on Contracts 
because Runzheimer's decision not to fire Friedlen carried with 
it the implicit expectation——though not a promise——of continued 
employment after the restrictive covenant was signed. 
The concurring opinion of Chief Justice Abrahamson contends 
that Runzheimer's promise that it would not fire Friedlen at 
that time and for that reason if he signed the restrictive 
covenant is illusory, and that Runzheimer must have promised 
"not to fire Friedlen without cause for a reasonable period of 
time."  Concurrence, ¶¶67, 68.  Neither of these contentions is 
consistent with the majority opinion and they do not represent 
the majority view. 
No. 
  2013AP1392 
21 
 
covenant.  Friedlen signed, and the contract was formed.  In 
fact, we have repeatedly recognized the existence of lawful 
consideration in the inverse situation——when an at-will employee 
continues 
working 
for 
the 
employer 
in 
exchange 
for 
a 
modification or addition to the employment agreement.11  In these 
situations, 
the 
employer 
is 
not 
getting 
"additional 
consideration" for the employee's continued employment, and, in 
the absence of an employment contract, the employee is still 
free to leave in the future. 
¶48 Moreover, to allow the forbearance of the right to 
terminate an at-will employee to constitute lawful consideration 
avoids the temptation for employers to circumvent the law.  If 
we were to hold that consideration beyond continued employment 
is necessary in cases like this, an employer might simply fire 
                                                 
11 See Ferraro v. Koelsch, 124 Wis. 2d 154, 168-69 n.5, 368 
N.W.2d 666 (1985) (an employee gives lawful consideration for an 
employer's promise of a raise or bonus when the employee chooses 
to stay on the job because "[h]e has in effect given up his 
right to quit, at least temporarily") (citation omitted); 
Prochniak v. Wis. Screw Co., 265 Wis. 541, 547, 61 N.W.2d 882 
(1953) 
("[Employee's] 
agreement 
to 
continue 
working 
for 
defendant under an arrangement whereby the overdraft would be 
wiped out and higher commissions would be paid is sufficient 
consideration for cancellation of the debt."); see also Tinder 
v. Pinkerton Sec., 305 F.3d 728, 734 (7th Cir. 2002) ("Wisconsin 
recognizes that, because at-will employees are free to quit 
their jobs at any time, at-will employees give adequate 
consideration for employer promises that modify or supplant the 
at-will employment relationship by remaining on the job."); 
Pincus v. Pabst Brewing Co., 893 F.2d 1544, 1549 (7th Cir. 1990) 
("[T]he promise of a right of first refusal provided by Pabst 
[employer] was exchanged for the promise by Pincus [employee] to 
continue employment under changed circumstances."). 
No. 
  2013AP1392 
22 
 
an existing at-will employee and then re-hire the employee the 
next day with a covenant not to compete.  See Curtis 1000, Inc. 
v. Suess, 24 F.3d 941, 947 (7th Cir. 1994).  It is more 
appropriate for forbearance of the right to fire an existing at-
will employee to constitute lawful consideration. 
¶49 It is of no consequence that Runzheimer's promise not 
to fire Friedlen was for an indeterminate period of time because 
the length of the promise's duration goes to the adequacy of 
consideration, not the existence of lawful consideration.  We 
have previously stated that we will not address the adequacy of 
consideration: 
"[A] 
valuable 
consideration 
however 
small 
is 
sufficient to support any contract; . . . inadequacy 
of consideration alone is not a fatal defect." The law 
concerns itself only with the existence of legal 
consideration 
because 
"the 
adequacy 
in 
fact, 
as 
distinguished from value in law, is for the parties to 
judge for themselves." A consideration of even an 
indeterminate value, incapable of being reduced to a 
fixed sum, can be sufficient to constitute legal 
consideration. 
St. Norbert Coll. Found., Inc. v. McCormick, 81 Wis. 2d 423, 
430-31, 260 N.W.2d 776 (1978) (internal citations omitted). 
¶50 Therefore, we need not weigh Friedlen's promise not to 
compete against Runzheimer's promise not to fire him.  Lawful 
No. 
  2013AP1392 
23 
 
consideration existed, as both parties agreed to give up a legal 
right.  The inquiry ends there.12 
E. Other Principles 
¶51 It is true that shortly after Friedlen signed the 
covenant, Runzheimer could have fired him.  This possibility 
motivated the circuit court's decision, which reasoned that the 
potential of Friedlen's immediate firing rendered any purported 
consideration by Runzheimer "illusory." 
¶52 The circuit court erred when it relied on the fear of 
immediate termination to determine that Runzheimer's promise was 
                                                 
12 We do not necessarily treat new at-will employees exactly 
the same as existing at-will employees in all circumstances.  A 
new at-will employee has relatively equal bargaining power to 
the employer, whereas in an established relationship, the 
employer often has more bargaining power than the employee due 
to the employee's reliance on his or her employment income, 
fringe benefits, and other considerations. 
However, in an established employment relationship, the 
consequences to the employer of an employee's departure to work 
for a competitor may sometimes be much greater than they would 
be early in the relationship.  For example, an employer may 
expend substantial resources over a long period of time to help 
one of its employees establish personal relationships with 
clients and potential clients.  If such an employee were not 
subject to a restrictive covenant, he or she might hold 
significantly more bargaining power than the employer, as his or 
her departure to a competitor could severely damage the 
employer's 
interests 
as 
well 
as 
the 
interests 
of 
other 
employees. 
Thus, there is no overriding policy concern that would 
require substantially greater protections of existing employees 
than new employees in terms of the consideration required to 
form an enforceable restrictive covenant. 
 
No. 
  2013AP1392 
24 
 
illusory.  Existing contract principles adequately address such 
a situation. 
¶53 First, in First National Bank & Trust Co. v. Notte, 97 
Wis. 2d 207, 209, 293 N.W.2d 530 (1980), we stated that "if a 
party to a contract is induced to manifest his assent to the 
contract 
by 
[] 
means 
of 
a 
fraudulent 
or 
material 
misrepresentation by another party to the contract, the contract 
is 
voidable 
if 
the 
recipient 
justifiably 
relies 
on 
the 
misrepresentation."  Thus, an employee who relies on an 
employer's promise that he will not be fired if he signs a 
covenant not to compete would likely have a voidable contract, 
subject to rescission, if he were fired shortly after signing. 
¶54 Second, an employer acting in such a deceitful manner 
may be breaching the doctrine of good faith and fair dealing.  
We have stated that "[e]very contract implies good faith and 
fair dealing between the parties to it . . . ." Beidel v. 
Sideline Software, Inc., 2013 WI 56, ¶27, 348 Wis. 2d 360, 842 
N.W.2d 240 (quoting Chayka v. Santini, 47 Wis. 2d 102, 107 n.7, 
176 N.W.2d 561 (1970)).  As we explained in Beidel, Wisconsin 
disfavors "following the letter but not the spirit of an 
agreement, and . . . it [is] deemed a violation of the covenant 
of good faith and fair dealing to do so."  Id. 
¶55 When an employer promises not to fire an existing at-
will employee if the employee agrees to sign a restrictive 
covenant, the employer violates the spirit of the agreement when 
the employer fires the employee moments after the employee signs 
the covenant.  Firing the employee moments after the agreement 
No. 
  2013AP1392 
25 
 
is executed would accomplish "exactly what the agreement of the 
parties sought to prevent," which constitutes an independent 
breach, id., ¶28 (citation omitted), and would make the 
restrictive covenant unenforceable.  The modification in the 
employment relationship when an existing at-will employee signs 
a restrictive covenant is the restrictive covenant, not a new 
employment contract of reasonable duration; and it is the 
modification that would become unenforceable if the employer 
acts in bad faith. 
¶56 Friedlen argues that reliance on contract principles 
as remedies for misrepresentation or fraud places too heavy a 
burden on employees.  He contends that employees who encounter 
an employer who obtains a restrictive covenant in bad faith will 
be required to "engage counsel, bring suit, meet a burden of 
proof, and obtain the highly unusual remedy of rescission, all 
at great economic expense."  Yet, employees who wish to 
establish that any restrictive covenant is unlawful must bear 
the 
same 
burden, 
as 
the 
"burden 
of 
proving 
failure 
of 
consideration" is on the party seeking to avoid the contract.  
Jax v. Jax, 73 Wis. 2d 572, 586, 243 N.W.2d 831 (1976).  Our 
determination of what constitutes lawful consideration does not 
change how contract disputes are litigated. 
¶57 Normally, an employer that requires an employee to 
sign a restrictive covenant does so because the employer 
believes the employee is valuable and does not want to terminate 
the employment relationship.  Most employees "think it unlikely 
they will be fired as long as their work is satisfactory and the 
No. 
  2013AP1392 
26 
 
firm does not encounter rough weather."  Curtis 1000, 24 F.3d at 
946.  As Judge Richard Posner has stated, "Employers pay a price 
if they get a reputation for tricky dealings with their 
employees."  Id. 
¶58 Finally, it is worth noting that Wisconsin law allows 
for the enforcement of contracts that would otherwise fail for 
lack of consideration when there has been consideration-in-fact 
after the formation of the contract.  See Oby, 52 Wis. 2d at 8.  
Thus, although the parties did not argue the case in this way, 
it is likely that Runzheimer could have prevailed in the circuit 
court under a theory that Friedlen's actual continued employment 
for 29 months constituted lawful consideration. 
III. CONCLUSION 
¶59 In conclusion, we hold that an employer's forbearance 
in exercising its right to terminate an at-will employee 
constitutes lawful consideration for a restrictive covenant.  
Although, 
theoretically, 
an 
employer 
could 
terminate 
an 
employee's employment shortly after having the employee sign a 
restrictive covenant, the employee would then be protected by 
other 
contract 
formation 
principles 
such 
as 
fraudulent 
inducement or good faith and fair dealing, so that the 
restrictive covenant could not be enforced. 
¶60 In this case, the circuit court made no determination 
as to the reasonableness of the covenant's terms.  Because the 
record and arguments before this court are undeveloped on the 
issue of reasonableness, we decline to address it.  We therefore 
reverse the decision of the circuit court, and remand the cause 
No. 
  2013AP1392 
27 
 
to the circuit court for further proceedings consistent with 
this opinion. 
By the Court.—The judgment of the circuit court is reversed 
and the cause is remanded. 
 
 
 
 
No.  2013AP1392.ssa 
 
1 
 
 
¶61 SHIRLEY 
S. 
ABRAHAMSON, 
C.J.   (concurring). 
 
The 
instant case involves a dispute between an employer (Runzheimer 
International, Ltd.) and one of its former employees (David 
Friedlen) over the enforceability of a covenant not to compete.  
The question presented is whether a covenant not to compete 
between an employer and an existing at-will employee is 
supported by consideration from the employer.1 
¶62 When Friedlen signed the covenant not to compete, he 
had been working for Runzheimer as an at-will employee for over 
15 years.  Runzheimer did not promise to continue employing 
Friedlen if he signed the covenant.  Rather, Runzheimer informed 
Friedlen that he would be fired if he chose not to sign the 
covenant.2 
¶63 Friedlen signed the covenant not to compete.  He was 
fired roughly two years later. 
¶64 The majority opinion holds that Runzheimer provided 
consideration for Friedlen's signing the covenant not to 
compete.  An internal contradiction, however, pervades the 
majority 
opinion 
and 
renders 
its 
holding 
ambiguous 
and 
troublesome. 
¶65 On the one hand, the majority opinion concludes that 
Runzheimer promised not to "fire Friedlen at that time and for 
                                                 
1 For a discussion of this question, see, e.g., 1 E. Allan 
Farnsworth, Farnsworth on Contracts § 2.10(b) (3d ed. 2004). 
2 Majority op., ¶2. 
No.  2013AP1392.ssa 
 
2 
 
that reason."  Runzheimer therefore "performed immediately," 
according to the majority opinion, "when it forbore its legal 
right to fire Friedlen at that time."3  In other words, 
Runzheimer's 
forbearance 
from 
immediately 
firing 
Friedlen 
constituted consideration for Friedlen's signing the covenant 
not to compete. 
¶66 On the other hand, the majority opinion determines 
that Runzheimer's right to fire Friedlen shortly after having 
him sign a covenant not to compete was only "theoretical."4  If 
Friedlen had been fired shortly after signing the covenant, then 
according to the majority opinion, Friedlen could have brought 
suit to prevent the covenant's enforcement.  More specifically, 
the majority opinion holds that Friedlen would be protected by 
"contract formation principles such as fraudulent inducement or 
good faith and fair dealing, so that the restrictive covenant 
could not be enforced."5 
¶67 As I see it, if Runzheimer promised to forbear only 
from immediately firing Friedlen, then the promise was illusory 
and cannot serve as consideration.  Further, for the doctrines 
of fraudulent inducement and good faith and fair dealing to 
protect Friedlen from being fired shortly after signing the 
covenant not to compete, Runzheimer must have promised to do 
more than forbear from immediately firing Friedlen; it must have 
                                                 
3 Id., ¶46. 
4 Id., ¶¶5, 59. 
5 Id., ¶5. 
No.  2013AP1392.ssa 
 
3 
 
made an implicit promise not to fire Friedlen without cause for 
a reasonable period of time. 
¶68 Thus, to hold that the covenant not to compete is 
supported by consideration from Runzheimer, and to hold that the 
doctrines of fraudulent inducement and good faith and fair 
dealing would protect Friedlen if he were fired shortly after 
signing the covenant not to compete, the majority opinion in 
effect transforms the parties' at-will employment contract into 
an employment contract for a reasonable duration.  Understood 
this way, I agree with the majority opinion. 
¶69 I write separately to explain my position. 
I 
¶70 I begin by examining the majority opinion's stated 
interpretation of the promise Runzheimer made in exchange for 
Friedlen's signing the covenant not to compete. 
¶71 According to the majority opinion, Runzheimer provided 
consideration for the covenant not to compete by promising not 
to "fire Friedlen at that time and for that reason."6  In other 
words, the majority opinion interprets Runzheimer's promise as 
nothing more than a promise to forbear from immediately 
terminating Friedlen's at-will employment.  The majority opinion 
concludes that this promise was not illusory. 
¶72 As the majority opinion explains, a promise is 
illusory "when it is conditional on some fact or event that is 
wholly under the promisor's control and his [or her] bringing it 
                                                 
6 Id., ¶46. 
No.  2013AP1392.ssa 
 
4 
 
about 
is 
left 
wholly 
to 
his 
[or 
her] 
own 
will 
and 
discretion . . . ."7  The majority opinion refers in a footnote 
to the prototypical example of an illusory promise described in 
Corbin on Contracts, which is as follows:  "X guarantees payment 
of P's note in return for C's written promise to forbear from 
suing P as long as C wishes to forbear."8  Corbin on Contracts 
explains that "C's words may create the illusion of a promise, 
but in fact, C has made no promise."9 
¶73 There is no meaningful distinction, in my opinion, 
between C's promise in Corbin's prototypical example and 
Runzheimer's promise to Friedlen, if all Runzheimer promised was 
to forbear from terminating Friedlen's at-will employment for as 
long as Runzheimer wished to forbear.  C's forbearance was left 
wholly to C's will and discretion.  Runzheimer's forbearance 
from firing Friedlen was left wholly to Runzheimer's will and 
discretion.  C promised to forbear for as long as C wished to 
forbear.  Runzheimer promised to forbear from firing Friedlen 
for as long as Runzheimer wished to forbear. 
¶74 Thus, if Runzheimer promised to forbear only from 
immediately firing Friedlen, then in my view Runzheimer's 
promise to Friedlen was illusory.  Accordingly, under this 
                                                 
7 Majority op., ¶45 (internal quotation marks omitted) 
(quoting Metro. Ventures, LLC v. GEA Assocs., 2006 WI 71, ¶33, 
291 Wis. 2d 393, 717 N.W.2d 58). 
8 Majority op., ¶45 n.9 (citing 1 Joseph M. Perillo, Corbin 
on Contracts § 1.17, at 47 (Rev. ed. 1993). 
9 Majority op., ¶45 n.9 (citing 1 Joseph M. Perillo, Corbin 
on Contracts § 1.17, at 47 (Rev. ed. 1993). 
No.  2013AP1392.ssa 
 
5 
 
interpretation of Runzheimer's promise, Runzheimer failed to 
provide consideration for Friedlen's signing the covenant not to 
compete.10 
¶75 The majority opinion seems to recognize that the 
promise to forbear from immediately terminating an at-will 
employee is illusory.  The majority opinion states that under 
its 
interpretation 
of 
Runzheimer's 
promise, 
Runzheimer 
"theoretically" could have fired Friedlen shortly after Friedlen 
signed the covenant not to compete.11  The majority opinion 
contends, however, that if Runzheimer had fired Friedlen shortly 
after Friedlen signed the covenant not to compete, then Friedlen 
would "be protected by other contract formation principles such 
as fraudulent inducement or good faith and fair dealing, so that 
the restrictive covenant could not be enforced."12 
¶76 I turn to an examination of these contract doctrines 
as they apply in the instant case. 
II 
¶77 If 
Runzheimer 
promised 
only 
to 
forbear 
from 
immediately terminating Friedlen's at-will employment, then I 
fail to see how Friedlen could prevail on a claim of fraudulent 
inducement or breach of the covenant of good faith and fair 
                                                 
10 Devine v. Notter. 2008 WI App 87, ¶4, 312 Wis. 2d 521, 
753 N.W.2d 557 ("If a party to a purported contract has, in 
fact, made only illusory promises and therefore not constrained 
him- or herself in any way, he or she has given no consideration 
and therefore no contract exists."). 
11 Majority op., ¶¶5, 59. 
12 Id. 
No.  2013AP1392.ssa 
 
6 
 
dealing if he were fired shortly after signing the covenant not 
to compete. 
¶78 I conclude that by invoking these contract doctrines, 
the 
majority 
opinion 
reinterprets 
Runzheimer's 
promise 
to 
Friedlen to be more than a promise to forbear from firing 
Friedlen for as long as Runzheimer wished to forbear.  The 
majority opinion is in effect holding that Runzheimer implicitly 
promised not to terminate Friedlen's employment for a reasonable 
time.  Unless Runzheimer's promise is so interpreted, the 
doctrines of fraudulent inducement and good faith and fair 
dealing are not applicable to the instant case. 
¶79 A brief examination of the doctrines of fraudulent 
inducement and good faith and fair dealing will illustrate my 
point. 
¶80 First, 
fraudulent 
inducement 
occurs 
when 
the 
"fraudulent behavior" of one party to a contract undermines the 
capacity of the other party to "make an informed decision."13  A 
party 
engages 
in 
"fraudulent 
behavior" 
by 
knowingly 
or 
recklessly making a false statement when that statement is 
intended to defraud the other party and induce him or her to act 
                                                 
13 Digicorp, Inc. v. Ameritech Corp., 2003 WI 54, ¶48, 262 
Wis. 2d 32, 662 N.W.2d 652 (quoting Huron Tool & Eng'g Co. v. 
Precision Consulting Serv., Inc., 532 N.W.2d 541, 545 (Mich. Ct. 
App. 1995)). 
No.  2013AP1392.ssa 
 
7 
 
upon it, and when the other party in fact believes the false 
statement and relies upon it to his or her detriment.14   
¶81 Thus, to show that Runzheimer fraudulently induced 
Friedlen to sign the covenant not to compete, Friedlen would be 
required to demonstrate that Runzheimer made a false statement.  
If all Runzheimer promised was to forbear from terminating 
Friedlen's at-will employment at that time, what false statement 
did Runzheimer make?  The answer seems to be none.  After all, 
the whole point of at-will employment is that either party can 
terminate the employment relationship at any time.15 
¶82 Second, the implied covenant of good faith and fair 
dealing reflects the "common disfavor for following the letter 
but not the spirit of an agreement."16  "Every contract implies 
good faith and fair dealing between the parties . . . ."17  The 
                                                 
14 Kaloti Enters., Inc. v. Kellogg Sales Co., 2005 WI 111, 
¶12, 283 Wis. 2d 555, 699 N.W.2d 205.  See also First Nat'l Bank 
& Trust Co. v. Notte, 97 Wis. 2d 207, 223 n.7, 293 N.W.2d 530 
(1980) (explaining that to void a contract on the basis of 
fraudulent 
inducement, 
the 
party 
seeking 
rescission 
must 
demonstrate that the other party to the contract intentionally 
misrepresented the facts "to induce a party to manifest his 
assent . . . " 
(quoting 
Restatement 
(Second) 
of 
Contracts, 
§ 304(1) (Tent. Draft No. 11, 1976))). 
15 See Brockmeyer v. Dun & Bradstreet, 113 Wis. 2d 561, 567, 
335 N.W.2d 834 (1983); see also id. at 579 (Day, J., concurring) 
("'At will' contracts are employment contracts that . . . have 
no time duration and may be terminated at will by the employer 
or employee at any time 'for any reason or for no reason'" 
(emphasis added).). 
16 Beidel v. Sideline Software, Inc., 2013 WI 56, ¶27, 348 
Wis. 2d 360, 842 N.W.2d 240. 
17 Id., ¶27. 
No.  2013AP1392.ssa 
 
8 
 
doctrine of good faith and fair dealing may not be invoked, 
however, "to undo express terms of an agreement."18  In other 
words, when "a contracting party complains of acts of the other 
party which are specifically authorized in their agreement," the 
court will not find "any breach of the covenant of good faith."19 
¶83 Thus, to show that Runzheimer breached the implied 
covenant of good faith and fair dealing, Friedlen cannot 
complain of acts specifically authorized by his agreement with 
Runzheimer.  If all Runzheimer promised was to forbear from 
immediately terminating Friedlen's at-will employment, on what 
basis could Friedlen assert a breach of the covenant of good 
faith and fair dealing had Runzheimer fired Friedlen shortly 
after he signed the covenant not to compete?  The answer seems 
to be none.  An at-will employment contract specifically 
authorizes the employer to fire the employee at any time and for 
any reason. 
¶84 I 
conclude 
that 
Friedlen's 
claims 
of 
fraudulent 
inducement and good faith and fair dealing are doomed to failure 
if Runzheimer promised to forbear only from immediately firing 
Friedlen.  In contrast, if Runzheimer is viewed as implicitly 
promising not to terminate its employment relationship with 
Friedlen for a reasonable time, then had Runzheimer fired 
Friedlen shortly after he signed the covenant not to compete, 
                                                 
18 Id., ¶29. 
19 Super Valu Stores, Inc. v. D-Mart Food Stores, Inc., 146 
Wis. 2d 568, 577, 431 N.W.2d 721 (Ct. App. 1988) (emphasis 
added). 
No.  2013AP1392.ssa 
 
9 
 
Friedlen would have had a viable claim of fraudulent inducement 
or breach of the covenant of good faith and fair dealing. 
¶85 The majority opinion's reliance on the doctrines of 
fraudulent inducement and good faith and fair dealing therefore 
means that the majority opinion views Runzheimer as implicitly 
promising to refrain from firing Friedlen for a reasonable time 
after Friedlen signed the covenant not to compete.  This 
promise, unlike a promise of continued at-will employment, is 
not illusory. 
* * * * 
¶86 The majority opinion follows two contradictory paths:  
It states that Runzheimer promised to forbear from firing 
Friedlen immediately, but implies that Runzheimer promised to 
forbear from firing Friedlen for a reasonable time.  It states 
that a promise to forbear from immediately firing Friedlen 
constitutes consideration for Friedlen's signing the covenant 
not to compete, but concludes that the covenant could not be 
enforced if Friedlen had been fired shortly after signing it. 
¶87 Runzheimer did not fire Friedlen for two years after 
Friedlen signed the covenant.  Runzheimer views the substantial 
period of Friedlen's employment following Friedlen's signing the 
covenant not to compete as supplying any consideration that may 
have been missing at the time Friedlen signed the covenant.  The 
majority opinion seems to agree. 
¶88 Cases are collected by the majority opinion and in the 
Reporters' Notes to Comments e. and f. to § 8.06 of the 
Restatement (Third) of Employment Law, Proposed Final Draft 
No.  2013AP1392.ssa 
 
10 
 
(2014).  These cases are all over the map, but many states hold 
that 
a 
promise 
of 
continued 
indefinite 
employment 
is 
consideration for a restrictive covenant signed by an existing 
at-will employee.  Some of these cases find consideration in an 
implied promise to forbear from firing the employee for a 
substantial time after the covenant is signed,20 and others find 
it in the fact of continued employment for a substantial time 
after the covenant is signed.21 
¶89 Thus, cases from various jurisdictions support my view 
that the covenant not to compete at issue in the instant case 
was supported by consideration from Runzheimer if Runzheimer is 
viewed as having implicitly promised to forbear from firing 
Friedlen for a reasonable time.  I understand the majority 
opinion as in effect holding just that: In exchange for 
Friedlen's signing the covenant not to compete, Runzheimer 
promised not to terminate Friedlen's employment for a reasonable 
time.  I therefore agree with the majority opinion. 
¶90 For the reasons set forth, I write separately. 
 
                                                 
20 See, e.g., Crowell v. Woodruff, 245 S.W.2d 447, 449-50 
(Ky. Ct. App. 1951) (holding that a non-compete agreement 
entered into by an existing employee was "dubious" for "lack of 
mutuality," and that "[t]here must be read into the contract an 
implied obligation to retain [the employee for] such period of 
time as would deserve the right to enforce the [non-compete 
agreement]"). 
21 See, e.g., Simko, Inc. v. Graymar Co., 464 A.2d 1104, 
1107-08 (Md. App. 1983) ("[T]he continuation of employment for a 
substantial period beyond the threat of discharge is sufficient 
consideration for a restrictive covenant."). 
No.  2013AP1392.ssa 
 
 
 
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