Yes, the non-compete is a real contract because the company's decision not to fire Friedlen was a valid trade. Runzheimer had the legal right to fire Friedlen at any moment. By choosing not to fire him in exchange for his signature, they gave something up. That trade, or 'forbearance,' is enough to make the contract valid. It would be unfair if a company could fire you moments after you sign, but other legal rules about 'good faith' and 'fair dealing' would protect an employee in that situation.

Yes, but the main opinion's logic is a bit shaky. The deal is only fair if we assume the company also implicitly promised to keep the employee for a 'reasonable time.' Just promising not to fire someone 'right this second' is like promising nothing at all, because the company could still fire them a minute later. The only way this deal makes sense is if we believe the company was really promising not to fire the employee for a reasonable period, not just for a split second.

Yes, it's fair. The main decision says that the company's promise not to fire the employee right away is a good enough reason for the employee to agree not to work with competitors later. This is because the employee gets to keep their job for a while, which is valuable. Even though the company could still fire the employee soon after, there are other rules that would protect the employee if the company wasn't being fair. The court also says that allowing this kind of agreement stops companies from trying to cheat the system by firing and rehiring employees just to make the agreement valid.

Yes, but it's a bit more complicated. The agreeing judge says that this promise by the company should mean that the employee will keep their job for a reasonable time, not just any short period, to make the agreement fair. She thinks the main decision might be confusing about what exactly the company is promising. She believes that for the agreement to be truly fair, the company must be promising not to fire the employee without a good reason for a reasonable amount of time.

Yes, but it's a bit more complicated. This promise by the company should mean that the employee will keep their job for a reasonable time, not just any short period, to make the agreement fair. The main decision might be confusing about what exactly the company is promising. For the agreement to be truly fair, the company must be promising not to fire the employee without a good reason for a reasonable amount of time.

Yes. An employer's forbearance in exercising its right to terminate an at-will employee constitutes lawful consideration for signing a restrictive covenant. Forbearance from exercising a legal right is a well-established form of consideration. The promise is not illusory because it is not about future discretionary conduct; rather, it is an immediate performance where the employer forgoes its right to terminate the employee at that time and for the reason of not signing. The adequacy of this consideration (i.e., how long the employment actually continues) is not a matter for the court to weigh, as the law is concerned only with the existence of consideration, not its value. Furthermore, if an employer were to terminate an employee shortly after they signed the covenant, doctrines such as fraudulent inducement or the duty of good faith and fair dealing would protect the employee by rendering the covenant unenforceable.

Yes, but only if the employer's promise is interpreted as an implicit promise of employment for a reasonable duration. The majority's stated reasoning that the promise is merely to forbear from firing the employee 'at that time and for that reason' is an illusory promise, as it leaves the employer free to terminate the employee moments later. For the doctrines of fraudulent inducement and good faith to apply as the majority suggests, the employer must have promised something more substantial. Therefore, the holding is only sound if it implicitly transforms the at-will relationship into an employment contract for a reasonable time, which is not illusory and constitutes valid consideration.

Yes. The majority holds that forbearance by an employer in exercising its right to terminate an at-will employee constitutes lawful consideration for a restrictive covenant. This is because the employee gains the benefit of continued employment, which is not considered illusory or without value. The court reasons that although an employer could theoretically terminate an employee shortly after having them sign a restrictive covenant, the employee would be protected by other contract formation principles such as fraudulent inducement or good faith and fair dealing. The majority emphasizes that the length of the promise's duration goes to the adequacy of consideration, not its existence. The court also notes that allowing forbearance to constitute consideration avoids potential circumvention of the law, where employers might fire and immediately rehire employees to create consideration. The majority reverses the circuit court's decision and remands for further proceedings on the reasonableness of the covenant's terms.

Yes, but with reservations. Chief Justice Abrahamson agrees that forbearance can constitute consideration but emphasizes that the promise must imply a reasonable duration of continued employment to avoid being illusory. The concurrence critiques the majority's reasoning as potentially misleading regarding the nature of the employer's forbearance. Abrahamson argues that for the doctrines of fraudulent inducement and good faith and fair dealing to protect the employee, the employer must have implicitly promised not to fire the employee without cause for a reasonable period. The concurrence suggests that the majority opinion effectively transforms the at-will employment contract into an employment contract for a reasonable duration.

Yes. Forbearance by an employer in exercising its right to terminate an at-will employee constitutes lawful consideration for a restrictive covenant. This is because the employee gains the benefit of continued employment, which is not considered illusory or without value. Although an employer could theoretically terminate an employee shortly after having them sign a restrictive covenant, the employee is protected by other contract formation principles such as fraudulent inducement or good faith and fair dealing. The length of the promise's duration goes to the adequacy of consideration, not its existence. Allowing forbearance to constitute consideration avoids potential circumvention of the law, where employers might fire and immediately rehire employees to create consideration. We reverse the circuit court's decision and remand for further proceedings on the reasonableness of the covenant's terms.

Yes, but with reservations. Forbearance can constitute consideration but the promise must imply a reasonable duration of continued employment to avoid being illusory. The majority's reasoning is potentially misleading regarding the nature of the employer's forbearance. For the doctrines of fraudulent inducement and good faith and fair dealing to protect the employee, the employer must have implicitly promised not to fire the employee without cause for a reasonable period. The majority opinion effectively transforms the at-will employment contract into an employment contract for a reasonable duration.

Runzheimer International, Ltd. v. David Friedlen

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