News & Analysis as of August 2, 2025

Forfeiture

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Non-Compete Agreements are contracts, typically formed in employment or business purchase contexts, where one party agrees to refrain from engaging in a particular line of work or pursuing business within a certain industry or locale. The purpose of these agreements is to protect employers or business purchasers from competition stemming from former employees or former owners of a business. less -

Massachusetts Supreme Judicial Court Ruling: Noncompetition Agreement Act Does Not Apply to Forfeiture Clauses

ArentFox Schiff on 7/10/2025

The Massachusetts Supreme Judicial Court (SJC) recently clarified the scope of the Massachusetts Noncompetition Agreement Act (MNAA). In Susan Miele v. Foundation Medicine, Inc., the SJC held the MNAA does not apply where a...more

Massachusetts High Court Rules for Employer in Nonsolicitation Challenge

Shook, Hardy & Bacon L.L.P. on 6/18/2025

Although the Massachusetts Noncompetition Agreement Act expressly excludes nonsolicitation agreements from its definition of “noncompetition agreements,” the Massachusetts Supreme Judicial Court (SJC) recently responded to a...more

Supreme Judicial Court Clarifies Scope of Massachusetts Noncompetition Agreement Act

Holland & Knight LLP on 6/16/2025

The Massachusetts Supreme Judicial Court (SJC) has ruled that a forfeiture clause triggered by a breach of a non-solicitation agreement is not a "forfeiture for competition agreement" under the Massachusetts Noncompetition...more

The Forfeited Equity Trap: Why Your Non-Compete Might Be Worthless

Farrell Fritz, P.C. on 6/2/2025

Imagine you’re a private equity firm. You buy a company, and you want to retain and incentivize key employees, so you give them some equity in the form of incentive units. You also want to prevent them from running off and...more

Restrictive Covenants Unenforceable Where Consideration Forfeited

Troutman Pepper Locke on 5/23/2025

In North American Fire Ultimate Holdings, LP v. Alan Doorly, the Delaware Court of Chancery held that the restrictive covenants included in an incentive unit grant agreement were unenforceable when the units received by the...more

Massachusetts High Court To Weigh In on Forfeiture-for-Solicitation Provisions in Era of Massachusetts Noncompetition Agreement...

Epstein Becker & Green on 3/14/2025

On Monday, March 3, 2025, the Massachusetts Supreme Judicial Court (“SJC”) heard argument in Miele v. Foundation Medicine, Inc., regarding whether the Massachusetts Noncompetition Agreement Act, G. L. c. 149, § 24L (the...more

Seventh Circuit Rules Forfeiture-for-Competition Clauses Under Delaware Law Enforceable and Not Subject to Reasonableness Review

Ogletree, Deakins, Nash, Smoak & Stewart,... on 2/6/2025

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

Delaware Supreme Court Settles Forfeiture-for-Competition Question, Adopts Employee Choice Doctrine - Seventh Circuit Asks, ‘Are...

BakerHostetler on 3/22/2024

Less than two months after the Delaware Supreme Court provided the employers, investment partners and other business leaders that trust in the stability of Delaware law to protect their critical business interests with the...more

Delaware Supreme Court Rejects “Reasonableness” Test for Forfeiture-for- Competition Provisions

Paul Hastings LLP on 2/8/2024

Last week, the Delaware Supreme Court reversed a Chancery Court decision that we wrote about previously, which invalidated a forfeiture-for-competition provision as an unreasonable restraint of trade. The Ainslie et al. v....more

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Non-Compete Agreements › Breach of Contract › Forfeiture

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