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In Cleveland Integrity Services, LLC v. Byers (Del. Ch. Feb. 28, 2025), the Delaware Court of Chancery declined to enforce a two-year non-compete agreement that it found to be geographically overbroad and refused to narrow or...more
In Fortiline, Inc. v. McCall, the plaintiffs sought to enforce a noncompetition agreement against its former employees through a preliminary injunction. The court denied the injunction, holding the noncompetition agreements...more
A notable trend has emerged in Delaware with respect to the enforceability of non-competes – while once considered a management-friendly jurisdiction, two recent decisions demonstrate a marked shift towards a closer scrutiny...more
LKQ Corp. v. Rutledge, C.A. No. 110, 2024 (Del. Dec. 18, 2024) - In this en banc decision, the Delaware Supreme Court answered a certified question from the United States Court of Appeals for the Seventh Circuit...more
Welcome to the April 2025 edition of the Jenner & Block Japan Newsletter, a publication containing updates about legal developments in the United States that may be noteworthy to our clients and other leaders in the Japanese...more
The Delaware Supreme Court’s decision in Sunder Energy, LLV v. Jackson, No. 455, 2023, 2024 Del. LEXIS 407 (December 10, 2024) reaffirmed the courts’ limited willingness to modify or “blue-pencil” overbroad restrictive...more
As we approach the end of the first quarter in 2025, we have seen notable developments in non-compete law over the last 12 months. As the new administration decides what to do with non-competes at the federal level, state...more
In a recent en banc decision, Delaware’s Supreme Court upheld a key tool available to employers to enforce forfeiture-for-competition provisions against former employees. Delaware’s Chancery Court has shown an increasing...more
A recent decision by the U.S. Court of Appeals for the Seventh Circuit allowed an employer to enforce a “forfeiture-for-competition” against a former plant manager. The Court explained that, under Delaware law, forfeiture-for...more
In 2021, LKQ Corporation (LKQ) filed suit against Robert Rutledge, its former plant manager, in the U.S. District Court for the Northern District of Illinois. LKQ alleged that Rutledge’s working for a competitor within nine...more
Seventh Circuit upholds forfeiture-for-competition provision in restricted stock unit agreement - A Seventh Circuit panel, in LKQ Corporation v. Rutledge, held that an employer could enforce a “forfeiture-for-competition”...more
Partners Vincent Cannizzaro and Barnaby Grzaslewicz recently presented Recent Developments in Delaware Restrictive Covenant Case Law: The Alternative Entity Creep, providing key insights into how Delaware’s courts are...more
In line with the national trend making noncompetes more difficult to enforce, a number of Delaware courts have recently refused to “blue pencil” overbroad noncompetition agreements and have stricken them in their entirety. As...more
October 6, 2024 marks the two-year anniversary of Kodiak Building Partners, LLC v. Adams—the case in which the Delaware Chancery Court refused to enforce a sale-of-business non-compete against an executive who received $1...more
Sunder Energy, LLC recently sought to enforce a non-compete agreement against its former head of sales in the Delaware Court of Chancery. Sunder Energy, LLC v. Jackson, 2023 WL 8166517. Vice Chancellor J. Travis Laster...more
On August 31, 2023, the Delaware Court of Chancery held, with respect to a non-compete provision in an employment agreement, that: (1) the choice of law provision selecting Delaware was “not necessarily binding”; and (2) the...more
Businesses frequently choose Delaware as the governing law and venue for enforcement when drafting many kinds of agreements, including non-competition covenants. Delaware is attractive for several reasons, including robust...more
Over the past six months, the Delaware Court of Chancery has issued a series of decisions narrowing the scope of permissible non-compete agreements, while declining to “blue pencil” those provisions to render them...more
On March 16, 2023, the Delaware Chancery Court in Intertek Testing Services NA, Inc. v. Eastman found a sale-of-business non-compete was overbroad, given its worldwide geographic scope, and refused to modify it to make it...more
Courts and state legislatures continue to take aim at post-employment non-competes. In a companion blog, we recently detailed the Federal Trade Commission’s proposed rule banning post-employment non-competes. However, for...more