A Wisconsin federal court recently reminded us that noncompete agreements are only as strong as their drafting and structure. In Hribar Transport LLC v. Slegers, the trucking company sued a former employee, claiming he breached a noncompete clause by forming a competing logistics business and taking customers. The employee, however, argued that his contract had expired and that a later letter concerning his salary came from a different affiliate company, not his actual employer. The court agreed with him and granted summary judgment for the defendant.
The judge found that the restrictive covenants in the 2014 employment agreement were unenforceable because the document was poorly drafted and ambiguous about key terms such as “Business,” “Buyer,” and “Customer.” Additionally, the extension letter that the company relied on came from a different entity (Hribar Logistics, not Hribar Transport), so it couldn’t legally extend or renew the original contract. Although the court noted that the noncompete language technically survived for two years after the contract expired, it ultimately ruled that the restrictions were too broad and unreasonable under Indiana law.
This case underscores how multi-entity companies must pay close attention to who provides and signs an employee’s agreement.
If contracts are outdated, ambiguous, or inconsistent with a corporate structure, the restrictive covenants could be thrown out entirely. Employers should review their agreements to ensure:
- The correct company is a party to the contract,
- The duration and geographic scope of the noncompete clause are reasonable,
- Any extensions or renewals are clearly documented in writing.
This post is for informational purposes only and does not constitute legal advice. If you have questions about your specific situation, you should contact a lawyer for assistance. Nothing herein is intended to create any attorney-client relationship between you and DLM LAW.
