Opinion ID: 1835915
Heading Depth: 3
Heading Rank: 3

Heading: The Confidentiality Clause

Text: ¶ 59 The confidentiality clause of the employment contract consists of a single, convoluted paragraph beginning with an 18-line sentence containing 20 sub-clauses separated by 19 commas. Put gently, it is not a model of clarity. The confidentiality clause bars Dal Pra, for 24 months following his termination, from using or disclosing any information or knowledge, known, disclosed or otherwise obtained by him during his employment by Employer or CB Distributors. It then lists a variety of specific information that is to be deemed confidential and protected, including but not limited to knowledge conceived, discovered or developed by Employee or CB Distributors, proprietary products or procedures, trade secrets, customer lists, marketing techniques which are not generally known in the business community, and which relate to the business of the Employer or CB Distributors or are in the nature of trade or business secrets, mailing lists, and special pricing information. ¶ 60 Though Star Direct did not bring a claim under the confidentiality clause, the circuit court concluded that it was overbroad and unenforceable because it barred Dal Pra from using or disclosing any information. [10] The court of appeals did not address this issue. ¶ 61 Dal Pra does not assert that the provision is unreasonable as to its duration, geographic scope, to himself, or to public policy. Neither do we find anything in the record that calls these into question. Thus, the main question is whether the prohibitions of the confidentiality clause are reasonably necessary for the protection of Star Direct. And the central dispute is what the clause actually means. ¶ 62 One of the running themes in this case is how broadly or narrowly to read restrictive covenants. As discussed earlier, it is true that we read restrictive covenants in favor of the employee. Streiff, 118 Wis.2d at 611, 348 N.W.2d 505. But this does not mean we make an effort to read a clause unreasonably in order to find the clause unreasonable and unenforceable against the employee. Though they are disfavored at law, our task is still to rightly and fairly interpret non-compete agreements as contracts. See Wysocki, 243 Wis.2d 305, ¶ 11, 627 N.W.2d 444. ([W]e cannot allow the underlying policy of Wis. Stat. § 103.465 and our rules of construction to overwhelm the focus of our analysis in what are, at their core, contract cases.) This means we must interpret them reasonably so as to avoid absurd results, giving the words their plain meaning, reading as a whole, and giving effect where possible to every provision. In re All-Star Ins. Corp., 112 Wis.2d 329, 333, 332 N.W.2d 828 (Ct.App. 1983); DeWitt Ross & Stevens, S.C. v. Galaxy Gaming & Racing Ltd. P'ship, 2004 WI 92, ¶ 44, 273 Wis.2d 577, 682 N.W.2d 839. It is only within this framework that we interpret restrictive covenants in favor of the employee. ¶ 63 Here, the language of the confidentiality clause betrays the circuit court's interpretation. All of the enumerated examples of protected information in the confidentiality clause are of a proprietary nature. This is important for at least two reasons. First, the inclusion of examples, particularly with modifiers indicating the confidential nature of the information, shows that the circuit court's interpretation is in error. For example, the modifier proprietary when discussing products and procedures would be rendered mere surplusage if the clause truly means any information. Similarly, the clause prohibits the divulging of marketing techniques not generally known in the business community. Again, this language would be surplusage under the circuit court's approach. Additionally, we think the confidential nature of the itemized examples indicates the true intent of the clause. The only reasonable construction of the clause considered in its totality is that it prohibits Dal Pra's use of confidential information of the type identified in the examplesinformation of a confidential and sensitive nature that, if made public or used by Dal Pra, would be deleterious to Star Direct's business. All of the itemized examples fit this general pattern. ¶ 64 Prohibiting Dal Pra from exploiting or disclosing this information is reasonably necessary for Star Direct's protection. As already noted, the parties do not seriously dispute that the confidentiality clause is reasonable as to time, territory, to Dal Pra, and to the public or public policy. Therefore, we conclude that the confidentiality clause is enforceable so long as it is divisible from the unenforceable business clause. That is where we now turn.