Are employee non-compete agreements enforceable in Delaware?
Yes, if the covenant is reasonable, protects a legitimate economic interest, and survives the equities. Delaware courts do not mechanically enforce non-competes .
Delaware has no general wage-threshold, notice, or garden-leave statute for ordinary employee non-competes. The baseline rule is common law. The covenant must meet contract-law requirements, fit the protected business interest, and avoid imposing unusual hardship or an unreasonable restraint on trade.
The practical posture is pro-enforcement only for disciplined drafting. A Delaware choice of law clause, executive status, or equity grant does not replace the reasonableness inquiry for a true restraint on post-employment competition.
Every covenant in a Delaware agreement stands or falls on the Court of Chancery's three-part review — reasonable in geographic scope and temporal duration, advancing a legitimate economic interest, and surviving a balancing of the equities — and the court reviews the restraint holistically, weighing each dimension and how it operates alongside every other restriction in the contract. Because the review reaches every dimension, added duration is measured too: a tolling extension that lengthens a restricted period during a breach is itself more duration the same holistic review weighs, so an open-ended or indefinite extension is exposed like any other overbroad term. Adequate consideration establishes only that a covenant is supported, not that it is reasonable, and even injunctive relief presupposes a covenant that first survives this review — a restraint that fails it is not rescued by a strong consideration recital or an irreparable-harm stipulation .
Sources for this answer
Primary source · Case law · 2020-03-27
A.1 FP UC Holdings, LLC v. HamiltonFP UC Holdings supports Delaware's modern reasonableness framework for non-competes.
Instead, our courts carefully review the covenants to assure they “(1) [are] reasonable in geographic scope and temporal duration, (2) advance a legitimate economic interest of the party seeking its enforcement, and (3) survive a balancing of the equities.”
See FP UC Holdings, LLC v. Hamilton, 2020 WL 1492783, at *6 (Del. Ch. Mar. 27, 2020).
Primary source · Case law · 2023-11-22
A.2 Sunder Energy, LLC v. JacksonSunder Chancery supports evaluating a restrictive covenant by its individual and combined dimensions.
When evaluating the reasonableness of a restrictive covenant, a court examines the restriction holistically and in context. That means evaluating all of the dimensions of the restrictive covenant and considering how it operates with other restrictions in the contract.
See Sunder Energy, LLC v. Jackson, 305 A.3d 723, 754 (Del. Ch. 2023), aff'd in relevant part, 332 A.3d 472 (Del. 2024).
What makes a Delaware non-compete reasonable?
Delaware looks at the covenant's time, geography, activity scope, protected interest, consideration, and equitable effect together. A covenant should be no broader than the business interest it protects .
Recognized interests include employer goodwill and confidential information. In Payscale, the Delaware Supreme Court held at the pleading stage that an eighteen-month nationwide restriction could proceed where Payscale pleaded a nationwide business, high-value customer relationships, and confidential compensation-data strategy.
That is not a safe harbor for nationwide clauses. It is a procedural and factual point: broad scope may be supportable when the pleaded business reality is equally broad, but Delaware still requires tailoring. Surviving a motion to dismiss is not a ruling that the covenant is reasonable; it means only that the complaint pleaded enough to proceed past the pleading stage.
Sources for this answer
Primary source · Case law · 2026-03-19
B.1 Payscale Inc. v. NormanPayscale supports Delaware's recognition of employer goodwill and confidential information as legitimate interests.
For a restrictive covenant, “‘[l]egitimate interests’ recognized by Delaware law include protection of employer goodwill[] and protection of employer confidential information from misuse.”
See Payscale Inc. v. Norman, No. 297, 2025, slip op. at 15-16 (Del. Mar. 19, 2026).
Primary source · Case law · 2026-03-19
B.2 Payscale Inc. v. NormanPayscale supports allowing a nationwide non-compete claim to proceed at the pleading stage when the plaintiff pleads business-specific interests.
Payscale alleges that the non-compete’s terms are directly tied to protecting specific contracts with its most valued customers; at the pleadings stage, it is reasonable to infer that protecting relationships with these key customers is in Payscale’s “particularly strong economic interest.”
See Payscale Inc. v. Norman, No. 297, 2025, slip op. at 18 (Del. Mar. 19, 2026).
Will a Delaware court narrow or blue-pencil an overbroad non-compete?
Usually not as a litigation strategy. Delaware courts retain equitable discretion, but recent Chancery and Supreme Court decisions warn that overbroad covenants may fall rather than be rewritten .
The modern no-blue-pencil spine comes from Kodiak, Intertek, and Sunder. The reason is incentive-based: if courts routinely trim overbroad restrictions, employers can draft broadly, chill workers, and still get a lawful restraint if challenged. For a clause-by-clause pass over a specific agreement against these drafting rules, the Delaware non-compete reviewer checklist walks the full covenant suite item by item with each requirement's force level.
A Delaware covenant drafted on the assumption that a court will narrow it later carries the risk the covenant fails instead: recent Chancery and Supreme Court decisions increasingly refuse to blue-pencil an overbroad restraint and let it fall rather than rewrite it, calling partial enforcement of an overbroad covenant inequitable and warning that rescuing unreasonable covenants creates perverse incentives to overdraft. The scope a covenant can actually hold is the one written into the contract at signing — the protected business, restricted activities, customer set, geography, and duration — because a savings or reformation clause does not move a facially overbroad covenant back into the enforceable column. Severability earns its keep here: a sound non-solicit or confidentiality term drafted to stand on its own can survive a failed non-compete in a jurisdiction whose courts decline to repair the failed clause. A notice to a future employer that asserts a covenant a Delaware court would refuse to enforce or narrow overstates the sender's position and can create its own interference exposure.
Sources for this answer
Primary source · Case law · 2024-12-10
C.1 Sunder Energy, LLC v. JacksonSunder Supreme supports the rule that blue-penciling is discretionary and was properly refused on the record before the court.
This is not to say that Delaware courts should never blue pencil an agreement that is overbroad in some respects. But the relief Appellant sought was a wholesale reformation of the parties’ agreement.
See Sunder Energy, LLC v. Jackson, 332 A.3d 472, 495 (Del. 2024).
Primary source · Case law · 2022-10-06
C.2 Kodiak Building Partners, LLC v. AdamsKodiak supports refusing partial enforcement where blue-penciling would inequitably save an overbroad non-compete.
The inequities inherent in blue-penciling a noncompete also counsel against enforcing only those portions of the RCA that are supported by Kodiak’s legitimate business interests, even as Adams appears to have violated those portions.
See Kodiak Bldg. Partners, LLC v. Adams, 2022 WL 5240507, at *13 n.108 (Del. Ch. Oct. 6, 2022).
Primary source · Case law · 2023-03-16
C.3 Intertek Testing Services NA, Inc. v. EastmanIntertek supports refusing to revise a worldwide non-compete to rescue a sophisticated party from overreach.
In my view, revising the non-compete to save Intertek—a sophisticated party—from its overreach would be inequitable.
See Intertek Testing Servs. NA, Inc. v. Eastman, 2023 WL 2544236, at *5 (Del. Ch. Mar. 16, 2023).
Primary source · Case law · 2024-12-10
C.4 Sunder Energy, LLC v. JacksonSunder Supreme supports the policy concern that blue-penciling flagrantly overbroad restraints would create perverse drafting incentives.
This argument, however, turns the analysis on its head and creates perverse incentives for employers drafting restrictive covenants. If employers know that even the most unreasonable covenants will be enforced if an employee’s conduct is sufficiently flagrant, employers will be less incentivized to craft reasonable restrictions from the outset.
See Sunder Energy, LLC v. Jackson, 332 A.3d 472, 495 (Del. 2024).
How does Delaware treat sale-of-business non-competes?
Delaware gives sale-of-business covenants a less searching review than ordinary employment covenants, but the restraint still must match the goodwill and competitive space bought in the deal .
Kodiak is the cautionary example. The buyer acquired Northwest, but the covenant also protected unrelated Kodiak business segments and affiliates. The Court of Chancery refused preliminary enforcement because the restraint exceeded the interest purchased in the transaction .
Derge shows the other side. The Court of Chancery enforced a five-year sale-linked covenant against a C-suite executive who received nearly one million dollars in merger consideration and had operational knowledge across the acquired business.
A Delaware M&A covenant reaches only as far as the acquired business and the goodwill actually purchased; buyer-family affiliate language that sweeps in unrelated legacy businesses exceeds the interest bought in the transaction and is exposed to the same refusal to blue-pencil that governs employment covenants . The same goodwill match follows the covenant when it is assigned: a successor whose business does not correspond to the goodwill and confidential information the covenant was written to protect inherits the covenant's posture and may find it harder to enforce in its hands.
Sources for this answer
Primary source · Case law · 2025-12-08
D.1 Derge v. D&H United Fueling Solutions, Inc.Derge supports applying a less searching inquiry to sale-of-business non-competes than to employment non-competes.
By comparison, “covenants not to compete in the context of a business sale are subject to a ‘less searching’ inquiry than if the covenant ‘had been contained in an employment contract.’”
See Derge v. D&H United Fueling Sols., Inc., C.A. No. 2025-0087-BWD, slip op. at 12 (Del. Ch. Dec. 8, 2025).
Primary source · Case law · 2022-10-06
D.2 Kodiak Building Partners, LLC v. AdamsKodiak supports limiting sale-of-business covenants to the goodwill, assets, and information acquired in the sale.
In sum, Kodiak has a legitimate business interest in protecting the goodwill it purchased when it bought Northwest, and the confidential information about Kodiak operations that Adams knows or could access.
See Kodiak Bldg. Partners, LLC v. Adams, 2022 WL 5240507, at *8 (Del. Ch. Oct. 6, 2022).
Primary source · Case law · 2025-12-08
D.3 Derge v. D&H United Fueling Solutions, Inc.Derge supports greater deference where a restricted seller received substantial merger consideration for the covenant.
Plaintiff received substantial consideration—nearly $1 million—in a Merger that was conditioned on his agreement to the Non-Compete.
See Derge v. D&H United Fueling Sols., Inc., C.A. No. 2025-0087-BWD, slip op. at 16-17 (Del. Ch. Dec. 8, 2025).
Primary source · Case law · 2025-12-08
D.4 Derge v. D&H United Fueling Solutions, Inc.Derge supports enforcing an expansive sale-of-business covenant when it covers the market where the buyer has economic interests.
The record here shows that Tanknology conducted business across the United States and internationally, and that, as COO, Plaintiff had responsibility over operations across all markets. Thus, Defendants have a legitimate business interest in the Protected Area.
See Derge v. D&H United Fueling Sols., Inc., C.A. No. 2025-0087-BWD, slip op. at 19 (Del. Ch. Dec. 8, 2025).
How does Delaware treat customer and employee non-solicitation covenants?
Delaware reviews both customer and employee non-solicitation covenants for reasonableness the same way it reviews any restrictive covenant, and it refuses to blue-pencil an overbroad one.
Sunder Energy itself turned on restrictive covenants of exactly these kinds: a customer restriction barring any business with the company's customers and a personnel restriction barring recruitment of its people .
The Delaware Supreme Court treated the personnel restriction as a true employee non-solicit and held it overbroad because it reached anyone ever employed for any period of time , applied the four-part non-solicitation test , and declined to blue-pencil the covenant.
Delaware reviews customer and employee non-solicitation covenants for reasonableness the same way it reviews a non-compete and refuses to blue-pencil an overbroad one, so a personnel restriction reaching anyone ever employed for any period, or a customer restriction untethered from the accounts an employee actually touched, is exposed to being voided whole rather than trimmed. The scope Delaware credits is the narrow one tied to specific, identified relationships — the customers an employee had material contact with, protected through a defined look-back window — which is often a stronger and more readily enforceable protection than a broad non-compete when it sits beside the confidentiality and trade-secret terms .
Sources for this answer
Primary source · Case law · 2020-03-27
E.1 FP UC Holdings, LLC v. HamiltonDelaware reviews restrictive covenants holistically for reasonableness in scope and duration, legitimate economic interest, and the balance of equities.
Instead, our courts carefully review the covenants to assure they “(1) [are] reasonable in geographic scope and temporal duration, (2) advance a legitimate economic interest of the party seeking its enforcement, and (3) survive a balancing of the equities.”
See FP UC Holdings, LLC v. Hamilton, 2020 WL 1492783, at *6 (Del. Ch. Mar. 27, 2020).
Primary source · Case law · 2024-12-10
E.3 Sunder Energy, LLC v. JacksonSunder Energy concerned a customer non-solicit barring solicitation of and business with the employer's customers.
The 2019 LLC Agreement further prohibited Incentive Unit holders from soliciting, selling to, accepting any business from, or engaging in any business relationship with any of Sunder’s customers (the “Customer Restriction”)
See Sunder Energy, LLC v. Jackson, 332 A.3d 472, 481 n.35 (Del. 2024).
Primary source · Case law · 2024-12-10
E.2 Sunder Energy, LLC v. JacksonDelaware declines to blue-pencil an overbroad restrictive covenant, warning that rescuing unreasonable covenants creates perverse incentives to overdraft.
This argument, however, turns the analysis on its head and creates perverse incentives for employers drafting restrictive covenants.
See Sunder Energy, LLC v. Jackson, 332 A.3d 472, 495 (Del. 2024).
Primary source · Case law · 2020-03-27
E.6 FP UC Holdings, LLC v. HamiltonFP UC Holdings states Delaware's four-part reasonableness test specifically for enforcing a non-solicitation covenant.
Under Delaware law, a non-solicitation covenant is enforceable if it “(1) meets general contract law requirements, (2) is reasonable in scope and duration, (3) advances a legitimate economic interest of the party enforcing the covenant, and (4) survives a balance of the equities.”
See FP UC Holdings, LLC v. Hamilton, 2020 WL 1492783 (Del. Ch. Mar. 27, 2020).
Primary source · Case law · 2024-12-10
E.4 Sunder Energy, LLC v. JacksonSunder's Personnel Restriction is a true employee/contractor non-solicit barring recruitment of the company's personnel.
The Personnel Restriction prohibited Incentive Unit holders and their affiliates from recruiting or “encourag[ing] to leave” any individual whom Sunder employed, received services from, or had a business relationship with.
See Sunder Energy, LLC v. Jackson, 332 A.3d 472 (Del. 2024).
Primary source · Case law · 2024-12-10
E.5 Sunder Energy, LLC v. JacksonSunder held the employee non-solicit facially overbroad because it reached anyone ever employed by the company for any period.
The Personnel Restriction is similarly overbroad, preventing Jackson and his “affiliates” from directly or indirectly communicating regarding employment with any person who has ever been employed by Sunder for any period of time.
See Sunder Energy, LLC v. Jackson, 332 A.3d 472, 502 (Del. 2024).
Primary source · Case law · 2024-12-10
E.7 Sunder Energy, LLC v. JacksonThe Delaware Supreme Court held the Court of Chancery acted within its discretion in refusing to blue-pencil the overbroad covenants.
The Court of Chancery was well within its discretion to apply that precedent and refuse to blue pencil the covenants.
See Sunder Energy, LLC v. Jackson, 332 A.3d 472, 492 (Del. 2024).
Are equity-forfeiture or forfeiture-for-competition provisions enforceable in Delaware?
Yes — and not only in the limited-partnership setting. Delaware treats a forfeiture-for-competition provision as a condition on a deferred benefit rather than an injunction-backed restraint, and reviews it under the employee-choice doctrine instead of the ordinary reasonableness test .
The distinction matters. A true non-compete restrains work and is reviewed for reasonableness. A forfeiture-for-competition provision can let the former partner compete while losing a contingent benefit. In that setting, the Delaware Supreme Court held that public policy favored enforcing the limited partnership agreement against sophisticated parties.
Ainslie itself arose from a limited-partnership agreement, but the doctrine is not confined to that setting. In LKQ Corp. v. Rutledge, the Delaware Supreme Court advised the Seventh Circuit that Ainslie is not restricted to the limited-partnership context, extending the employee-choice doctrine to a corporate restricted-stock-unit forfeiture-for-competition provision .
Do not overread the doctrine. It governs forfeiture conditions on deferred benefits such as partnership distributions or equity awards; it does not let an employer relabel a covenant that directly bars work and thereby escape the reasonableness review that still governs true restraints on post-employment competition.
Sources for this answer
Primary source · Case law · 2024-01-29
F.1 Cantor Fitzgerald, L.P. v. AinslieAinslie supports treating the forfeiture-for-competition device as a condition precedent rather than a liquidated-damages remedy.
It found, instead, that the Competitive Activity Condition was a condition precedent to Cantor Fitzgerald’s duty to pay the Conditioned Amounts. We agree with that conclusion, and the Plaintiffs do not contest it on appeal.
See Cantor Fitzgerald, L.P. v. Ainslie, 312 A.3d 674, 690 (Del. 2024).
Primary source · Case law · 2024-01-29
F.2 Cantor Fitzgerald, L.P. v. AinslieAinslie supports the distinction between a restraint on work and a forfeiture of a contingent benefit.
Thus, the Competitive Activity Condition does not restrict competition or a former partner’s ability to work; nor does competition support injunctive relief.
See Cantor Fitzgerald, L.P. v. Ainslie, 312 A.3d 674, 694 (Del. 2024).
Primary source · Case law · 2024-01-29
F.3 Cantor Fitzgerald, L.P. v. AinslieAinslie supports enforcing a limited partnership forfeiture-for-competition clause against sophisticated parties.
To sum up, we disagree with the Court of Chancery’s conclusion that forfeiture-for-competition provisions like the one at issue here are restraints of trade subject to review for reasonableness.
See Cantor Fitzgerald, L.P. v. Ainslie, 312 A.3d 674, 700 (Del. 2024).
Primary source · Case law · 2024-12-18
F.4 LKQ Corp. v. RutledgeLKQ supports applying the employee-choice doctrine to forfeiture-for-competition provisions beyond the limited-partnership context, including corporate equity awards.
Cantor Fitzgerald is not restricted to the limited partnership context.
See LKQ Corp. v. Rutledge, No. 110, 2024 (Del. Dec. 18, 2024).
What consideration is required for a Delaware non-compete?
Delaware can treat continued at-will employment as sufficient consideration when signing is a condition of continued employment, and the Delaware Supreme Court measures consideration at contract formation rather than enforcement.
Powell upheld a restrictive covenant where the employee was told he would lose the position if he did not sign. Doorly later addressed equity-linked covenants and reversed dismissal where the Court of Chancery had evaluated consideration after the employee forfeited incentive units.
Consideration is not the whole analysis. A covenant supported by employment, promotion, cash, or equity still must satisfy the Delaware reasonableness test if it restrains post-employment competition. Doorly fixes whether consideration exists at formation, but the adequacy of that consideration is not irrelevant — the balancing of the equities still lets a court weigh how much the employee actually received against the breadth of the restraint .
Delaware measures consideration at the moment a covenant is formed, not at enforcement, so a covenant supported when signed is not unwound by a later forfeiture or change in benefits — and a covenant re-papered by amendment is its own formation event, which is why the value that moved at each signing is worth recording. Continued at-will employment can supply that consideration where signing is a condition of keeping the position, but a bare adequacy recital does less work than the specific value named: adequacy is not irrelevant, because the balancing of the equities still lets a court weigh how much the employee actually received against the breadth of the restraint .
Sources for this answer
Primary source · Case law · 1983-12-30
G.1 Research & Trading Corp. v. PowellPowell supports Delaware's rule that continued employment can supply consideration for a restrictive covenant.
The Court finds there was sufficient consideration at the time of the signing of the covenant to support an enforceable restrictive covenant.
See Research & Trading Corp. v. Powell, 468 A.2d 1301, 1305 (Del. Ch. 1983).
Primary source · Case law · 2026-02-03
G.2 North American Fire Ultimate Holdings, LP v. DoorlyDoorly supports measuring consideration at contract formation rather than at enforcement.
Because consideration is measured at the time of contracting and not at the time of enforcement, we reverse and remand for further proceedings.
See N. Am. Fire Ultimate Holdings, LP v. Doorly, No. 142, 2025, order at 2 (Del. Feb. 3, 2026).
Primary source · Case law · 1983-12-30
G.3 Research & Trading Corp. v. PowellPowell supports enforcing a covenant where signing was a condition of keeping the position.
Powell was told he would lose the position if he did not sign.
See Research & Trading Corp. v. Powell, 468 A.2d 1301, 1305 (Del. Ch. 1983).
Primary source · Case law · 2026-02-03
G.4 North American Fire Ultimate Holdings, LP v. DoorlyDoorly supports that consideration is not reevaluated when the plaintiff seeks enforcement.
Consideration is measured at the time of formation and is not reevaluated at the time of enforcement.
See N. Am. Fire Ultimate Holdings, LP v. Doorly, No. 142, 2025, order at 6 (Del. Feb. 3, 2026).
Primary source · Case law · 2026-03-19
G.5 Payscale Inc. v. NormanPayscale supports that the adequacy of consideration can still bear on the balancing of the equities even though consideration is measured at formation.
That is not to suggest that the adequacy of consideration is irrelevant in the context of restrictive covenants; the balancing-of-the-equities inquiry affords the court discretion to weigh the breadth of a restrictive covenant against the consideration that supports it.
See Payscale Inc. v. Norman, No. 297, 2025, slip op. at 17 (Del. Mar. 19, 2026).
Are physician non-competes allowed in Delaware?
No, not if the covenant restricts a physician's right to practice medicine by place or time after termination. Delaware Code § 2707 makes that type of physician non-compete void .
The statute is targeted. It applies to physician covenants in employment, partnership, or corporate agreements, and it leaves other agreement provisions enforceable. It also permits damages provisions if the amount is reasonably related to injury from termination, including damages related to competition .
In a Delaware physician agreement, a covenant that restricts a physician's right to practice medicine by locale or for a defined period after termination is void under Section 2707, which severs the practice restraint while leaving the rest of the agreement enforceable, including a damages provision in an amount reasonably related to the injury from termination. A damages clause bundled into the voided practice restraint, or set at an amount untethered to actual injury, sits outside what the statute preserves; the damages provision that survives is the one kept separate from any practice restriction and tied to reasonably related injury.
Sources for this answer
Primary source · Primary law · 1983-07-13
H.1 6 Del. C. § 27076 Del. C. § 2707 supports the rule that physician non-competes restricting practice by locale or time after termination are void.
Any covenant not to compete provision of an employment, partnership or corporate agreement between and/or among physicians which restricts the right of a physician to practice medicine in a particular locale and/or for a defined period of time, upon the termination of the principal agreement of which the said provision is a part, shall be void; except that all other provisions of such an agreement shall be enforceable at law, including provisions which require the payment of damages in an amount that is reasonably related to the injury suffered by reason of termination of the principal agreement.
See 6 Del. C. § 2707. (6 Del. C. § 2707)
Primary source · Primary law · 1983-07-13
H.2 6 Del. C. § 27076 Del. C. § 2707 supports allowing reasonably related damages provisions in physician agreements, including damages related to competition.
Provisions which require the payment of damages upon termination of the principal agreement may include, but not be limited to, damages related to competition.
See 6 Del. C. § 2707. (6 Del. C. § 2707)
Can a contract choose Delaware law to govern a non-compete?
Often yes for qualifying contracts, but not absolutely. Section 2708 supports Delaware choice-of-law clauses, while Delaware conflict-of-law decisions can still defer to another state's fundamental non-compete policy.
Section 2708 creates a strong Delaware-law anchor when the written contract selects Delaware law and the parties are subject to Delaware jurisdiction and service. The statute excludes contracts involving less than $100,000 .
But Ascension refused to let Delaware's contractarian policy automatically override California's statutory policy for a California employee and California-centered performance. FP UC Holdings applied the same Restatement-style framework when Alabama had the stronger interest in an Alabama non-compete issue.
Section 2708 gives a written Delaware choice-of-law selection a strong anchor — conclusively presumed to bear a significant, material, and reasonable relationship with Delaware and enforceable whether or not other relationships exist — but it does not reach a contract involving less than $100,000, so a selection resting on it in a smaller-value agreement rests on nothing. The anchor is not a universal workaround either: Delaware's own courts have declined to let its freedom-of-contract interest always trump another state's fundamental policy and have applied that other state's law where it had the materially greater interest, so a Delaware clause used against a worker whose residence and work center on another state invites a choice-of-law fight measured by the default state's policy and interest, not by the clause alone.
A Delaware choice-of-law clause is not a universal workaround for another state's non-compete restrictions. Before enforcing against an out-of-state worker, analyze the default state, its fundamental policy, and whether it has a materially greater interest in the specific covenant.
Sources for this answer
Primary source · Primary law · 1993-07-12
I.1 6 Del. C. § 27086 Del. C. § 2708 supports Delaware choice-of-law clauses in qualifying contracts.
The foregoing shall conclusively be presumed to be a significant, material and reasonable relationship with this State and shall be enforced whether or not there are other relationships with this State.
See 6 Del. C. § 2708(a). (6 Del. C. § 2708)
Primary source · Primary law · 1993-07-12
I.3 6 Del. C. § 27086 Del. C. § 2708 excludes contracts involving less than $100,000 from the statutory choice-of-law rule.
This section shall not apply to any contract, agreement or other undertaking: (1) To the extent provided to the contrary in § 1-301(c) of this title; or (2) Involving less than $100,000.
See 6 Del. C. § 2708(c). (6 Del. C. § 2708)
Primary source · Case law · 2015-01-28
I.2 Ascension Insurance Holdings, LLC v. UnderwoodAscension supports disregarding Delaware choice of law where another state has a materially greater fundamental policy interest in the non-compete.
I cannot agree with the Plaintiff, however, that the teaching of DGWL is that Delaware’s broad interest in freedom of contract will always, or even routinely, trump the default state’s public policy.
See Ascension Ins. Holdings, LLC v. Underwood, 2015 WL 356002, at *5 (Del. Ch. Jan. 28, 2015).
Primary source · Case law · 2020-03-27
I.4 FP UC Holdings, LLC v. HamiltonFP UC Holdings supports applying another state's law notwithstanding a Delaware choice-of-law clause where that state has the stronger non-compete policy interest.
If these narrow “questions are answered in the affirmative, [Alabama] law will apply notwithstanding the choice-of-law provision.”
See FP UC Holdings, LLC v. Hamilton, 2020 WL 1492783, at *10 (Del. Ch. Mar. 27, 2020).
How do trade-secret and confidentiality protections fit in?
DUTSA gives Delaware employers targeted trade-secret remedies that can substitute for, or sit beside, a narrower covenant package. It protects information that has independent economic value from secrecy and is subject to reasonable secrecy efforts .
DUTSA authorizes injunctions for actual or threatened misappropriation, damages for actual loss and unjust enrichment, exemplary damages for wilful and malicious misappropriation, and fee shifting in specified bad-faith or wilful-and-malicious cases.
It also preserves contract remedies, whether or not based on trade-secret misappropriation. That matters for confidentiality clauses, but a confidentiality clause should still be drafted around actual confidential information rather than as an indefinite non-compete by another name .
A confidentiality obligation drawn so broadly that it functions as an indefinite bar on competition invites the reasonableness review a properly bounded confidentiality clause is meant to avoid; scoped to genuinely confidential information, it operates alongside a covenant rather than as a restraint on work, and it does not reach the general knowledge, skill, and experience an employee builds on the job . DUTSA supplies its own remedies independent of any covenant — an injunction against actual or threatened misappropriation, and fee-shifting to a prevailing party in specified bad-faith or wilful-and-malicious cases — so a one-sided contractual fee clause is not the only path to fees, and a fee provision written to run only one way is worth checking for mutuality against the statute's even-handed standard.
Sources for this answer
Primary source · Primary law · 1982-07-08
J.1 6 Del. C. § 2001DUTSA supports Delaware's statutory definition of trade secret.
“Trade secret” shall mean information, including a formula, pattern, compilation, program, device, method, technique or process, that: a. Derives independent economic value, actual or potential, from not being generally known to, and not being readily ascertainable by proper means by, other persons who can obtain economic value from its disclosure or use; and b. Is the subject of efforts that are reasonable under the circumstances to maintain its secrecy.
See 6 Del. C. § 2001(4). (6 Del. C. § 2001)
Primary source · Primary law · 1982-07-08
J.2 6 Del. C. § 2002DUTSA supports injunctions for actual or threatened misappropriation.
(a) Actual or threatened misappropriation may be enjoined.
See 6 Del. C. § 2002(a). (6 Del. C. § 2002)
Primary source · Primary law · 1982-07-08
J.3 6 Del. C. § 2003DUTSA supports damages for actual loss, unjust enrichment, reasonable royalty, and exemplary damages for wilful and malicious misappropriation.
Damages can include both the actual loss caused by misappropriation and the unjust enrichment caused by misappropriation that is not taken into account in computing actual loss.
See 6 Del. C. § 2003(a). (6 Del. C. § 2003)
Primary source · Primary law · 1982-07-08
J.4 6 Del. C. § 2004DUTSA supports attorney fee shifting in specified bad-faith and wilful-and-malicious circumstances.
If a claim of misappropriation is made in bad faith, a motion to terminate an injunction is made or resisted in bad faith, or wilful and malicious misappropriation exists, the court may award reasonable attorney’s fees to the prevailing party.
See 6 Del. C. § 2004. (6 Del. C. § 2004)
Primary source · Primary law · 1982-07-08
J.5 6 Del. C. § 2007DUTSA supports preserving contractual remedies whether or not they are based on trade-secret misappropriation.
(1) Contractual remedies, whether or not based upon misappropriation of a trade secret;
See 6 Del. C. § 2007(b)(1). (6 Del. C. § 2007)
Are there other Delaware statutory non-compete limits?
Yes. Delaware separately protects home inspector trainees: a trainee cannot be required to sign a non-compete with a supervising licensed home inspector as a condition of satisfying trainee requirements .
This is a narrow licensing rule, not a general employee non-compete statute. It should be included in profession-specific reviews, especially for inspection businesses and trainee-supervision arrangements.
Sources for this answer
Primary source · Primary law · 2014-08-06
K.1 24 Del. C. § 4109(d)24 Del. C. § 4109(d) supports the rule that home inspector trainees cannot be required to execute a non-compete with a supervising inspector as a condition of trainee requirements.
(d) No person, while registered as a home inspector trainee, shall be required to pay any fee, charge or other thing of value to a supervising licensed home inspector, or be required to execute a covenant not to compete with a supervising licensed home inspector, as a condition of satisfying the home inspector trainee requirements of this subchapter.
See 24 Del. C. § 4109(d). (24 Del. C. § 4109(d))
What are the key recent developments in Delaware non-compete law?
From 2024 through 2026, the Delaware Supreme Court issued a run of restrictive-covenant decisions spanning the employee-choice doctrine, blue-pencil discretion, consideration timing, and pleading-stage treatment of broad employee covenants.
- January 29, 2024: Ainslie held that limited partnership forfeiture-for-competition provisions are not reviewed like ordinary non-competes when sophisticated parties agreed to the condition .
- December 10, 2024: Sunder affirmed refusal to blue-pencil exceptionally broad covenants and warned against incentives for overbroad drafting .
- December 18, 2024: LKQ Corp. v. Rutledge confirmed that Ainslie's employee-choice doctrine is not limited to limited partnerships and reaches corporate equity forfeiture-for-competition provisions .
- February 3, 2026: Doorly held that consideration is measured at contract formation, not at enforcement after equity forfeiture .
- March 19, 2026: Payscale reversed dismissal and rejected a pleading-stage inference against a nationwide covenant where the plaintiff pleaded specific business interests .
The through-line is not that Delaware became anti-enforcement. It is that Delaware separates contract forms carefully and demands fact-specific tailoring before enforcing true restraints on work.
Sources for this answer
Primary source · Case law · 2024-01-29
L.1 Cantor Fitzgerald, L.P. v. AinslieAinslie is a recent Delaware Supreme Court development distinguishing forfeiture-for-competition from ordinary non-compete restraints.
Thus, the Competitive Activity Condition does not restrict competition or a former partner’s ability to work; nor does competition support injunctive relief.
See Cantor Fitzgerald, L.P. v. Ainslie, 312 A.3d 674, 695 (Del. 2024).
Primary source · Case law · 2024-12-18
L.2 LKQ Corp. v. RutledgeLKQ is a recent Delaware Supreme Court development extending the employee-choice doctrine beyond limited partnerships to corporate equity forfeiture-for-competition provisions.
Cantor Fitzgerald is not restricted to the limited partnership context.
See LKQ Corp. v. Rutledge, No. 110, 2024 (Del. Dec. 18, 2024).
Primary source · Case law · 2024-12-10
L.3 Sunder Energy, LLC v. JacksonSunder Supreme is a recent Delaware Supreme Court development affirming refusal to blue-pencil overbroad covenants.
The Court of Chancery was well within its discretion to apply that precedent and refuse to blue pencil the covenants.
See Sunder Energy, LLC v. Jackson, 332 A.3d 472, 492 (Del. 2024).
Primary source · Case law · 2026-02-03
L.4 North American Fire Ultimate Holdings, LP v. DoorlyDoorly is a recent Delaware Supreme Court development clarifying that consideration is measured at contract formation.
Because consideration is measured at the time of contracting and not at the time of enforcement, we reverse and remand for further proceedings.
See N. Am. Fire Ultimate Holdings, LP v. Doorly, No. 142, 2025, order at 2 (Del. Feb. 3, 2026).
Primary source · Case law · 2026-03-19
L.5 Payscale Inc. v. NormanPayscale is a recent Delaware Supreme Court development allowing a restrictive covenant claim to proceed at the pleading stage based on pleaded business-specific interests.
Accordingly, the trial court erred in dismissing Payscale’s claim that Norman breached the non-compete provision.
See Payscale Inc. v. Norman, No. 297, 2025, slip op. at 18 (Del. Mar. 19, 2026).