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Delaware Supreme Court Affirms That Unreasonable Restrictive Covenants Are Not Enforceable, Regardless Of The Remedy Sought
04/23/2026On February 10, 2026, the Delaware Supreme Court, sitting en banc, affirmed a ruling by the Delaware Court of Chancery that restrictive covenants in employment agreements are subject to a reasonableness analysis regardless of whether a plaintiff seeks injunctive relief or monetary damages and granted summary judgment in favor of defendants. Fortiline, Inc. v. McCall, No. 300, 2025, 2026 WL 369934 (Del. Feb. 10, 2026). This decision clarifies an important distinction in Delaware law between restrictive covenants and forfeiture-for-competition provisions, with significant implications for employers seeking to enforce noncompete and non-solicitation agreements.
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Delaware Supreme Court Holds Restrictive Covenants Still Enforceable After Stock Unit Consideration Forfeited
04/23/2026On February 3, 2026, the Delaware Supreme Court, sitting en banc, reversed a decision from the Delaware Court of Chancery that had dismissed claims for breach of restrictive covenants and breach of the implied covenant of good faith and fair dealing brought by a company against a former employee. N. Am. Fire Ultimate Holdings, LP v. Doorly, No. 142, 2025, 2026 WL 274647 (Del. Feb. 3, 2026). The Court ruled that consideration must be measured at the time a contract was formed, not at the time of its enforcement, and thus the automatic forfeiture of the stock units granted in consideration did not nullify the covenants.
