Court Opinion

ID: 2797640
Source: CourtListenerOpinion
Date Created: 2015-04-30 13:07:14.758734+00
Date Added: 2024-06-11T12:07:26.658451
License: Public Domain

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.
                                                                        FILED
David Friedlen and Corporate Reimbursement                         APR 30, 2015
Services, Inc.,
                                                                      Diane M. Fremgen
                                                                   Clerk of Supreme Court
            Defendants-Respondents.

      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        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.

                                                 2
                                                                             No.     2013AP1392

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.

                                                  3
                                                                                 No.         2013AP1392

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]

                                                 4
                                                             No.   2013AP1392

        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

                                        5
                                                                     No.         2013AP1392

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.

                                           6
                                                                            No.      2013AP1392

        ¶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'
                                                7
                                                                                    No.        2013AP1392

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
                                                      8
                                                                                       No.       2013AP1392

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.
                                                      9
                                                                           No.         2013AP1392

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.

                                                 10
                                                                      No.        2013AP1392

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).

                                             11
                                                                 No.        2013AP1392

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
                                          12
                                                                            No.     2013AP1392

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)
                                             13
                                                                              No.         2013AP1392

       ¶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.

                                                14
                                                                   No.      2013AP1392

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."

                                          15
                                                                 No.        2013AP1392

     ¶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).
                                       16
                                                                No.        2013AP1392

     ¶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).

                                       17
                                                                             No.         2013AP1392

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
                                                   18
                                                                           No.         2013AP1392

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

                                                19
                                                                              No.        2013AP1392

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.

                                                 20
                                                                 No.      2013AP1392

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.").

                                            21
                                                               No.        2013AP1392

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

                                        22
                                                            No.     2013AP1392

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.

                                       23
                                                                          No.       2013AP1392

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
                                            24
                                                                          No.        2013AP1392

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
                                            25
                                                                            No.      2013AP1392

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
                                                26
                                                 No.   2013AP1392

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.

                               27
                                                                        No.    2013AP1392.ssa

       ¶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.

                                                1
                                                                          No.    2013AP1392.ssa

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.

                                                  2
                                                                         No.   2013AP1392.ssa

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.

                                              3
                                                                      No.    2013AP1392.ssa

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).

                                                 4
                                                                      No.   2013AP1392.ssa

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.

                                            5
                                                                             No.    2013AP1392.ssa

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)).

                                                  6
                                                              No.   2013AP1392.ssa

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.

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                                                                      No.       2013AP1392.ssa

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).

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                                                                            No.    2013AP1392.ssa

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

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                                                                          No.    2013AP1392.ssa

(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.").

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