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Gal Gressel

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Gal Gressel is a senior associate in the Labor and Employment Practice Group in the firm's San Francisco office.

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Delaware Courts Continue to Scrutinize Noncompete Agreements

As previously reported (here, here and here), courts in Delaware, the once favored “employer-friendly” jurisdiction, have increasingly scrutinized and refused to enforce noncompete agreements. In recent cases, Delaware courts have continued this trend, this time focusing on forfeiture-upon-competition provisions in equity or profit incentive agreements that also include affirmative restrictive covenants. Two of these cases are Delaware Chancery Court noncompete cases. Following on the heels of the Delaware Supreme Court’s affirmation of the employee choice doctrine, three trial courts have held that forfeiture of equity results in a failure of consideration such that the affirmative restrictive covenants are unenforceable. The practical effect of these cases is to force companies to choose between forfeiture or affirmative restrictions when crafting their equity contracts with employees. We can expect further developments in Delaware noncompete law and its implications for drafting incentive units and noncompete agreements under Delaware law, as two of the three cases are now on appeal. Recent cases are discussed below.Continue Reading Delaware Courts Limit Noncompete Enforcement in Incentive Plans

Arzate v. Ace American Insurance Company, — Cal. Rptr. 3d — (2025) began as a familiar case: plaintiffs signed arbitration agreements (“Agreement”) with their employer that contained a class action waiver. But when a dispute arose, plaintiffs disregarded their Agreements and filed a class action lawsuit. The defendant filed a motion to compel arbitration. The trial court granted the motion, enforced the class action waiver, and stayed the action pending arbitration.Continue Reading Plaintiffs, Not Defendants, Must Initiate Arbitration

As previously reported (here and here), some Delaware courts have recently declined to “blue pencil,” i.e., modify and narrow overbroad restrictive covenants. Instead, they have stricken in their entirety covenants deemed overbroad and declined to enforce them. On December 10, 2024, in Sunder Energy, LLC v. Tyler Jackson, et al., the Delaware Supreme Court affirmed that Delaware courts have the discretion to decline to blue pencil overbroad restrictive covenants, even if the defendant’s conduct would violate a more narrowly circumscribed covenant. Continue Reading Delaware Supreme Court Refuses to Enforce Noncompete Against Company Founder Who Joined Competitor

In Samuelian v. Life Generations Healthcare, LLC, — Cal. App. 5th —, 2024 WL 3878448 (Cal. App. Aug. 20, 2024), the California Court of Appeal answered two long outstanding questions of California law concerning the enforceability of noncompetition agreements in the context of the sale of a business:Continue Reading California Court of Appeal Rules That Partial Sale of Business Can Bind Seller-Owner to a Noncompetition Agreement

On May 10, 2024, the Ninth Circuit decided Yuriria Diaz v. Macy’s West Stores, after the employer appealed the district court’s decision ordering arbitration of both an employee’s individual and non-individual claims under the California Private Attorney Generals Act (PAGA). The Ninth Circuit held that even though the arbitration agreement made no mention of PAGA, an employee’s individual PAGA claim was still subject to arbitration because the parties’ intended to arbitrate all employment disputes between them. However the non-individual PAGA claims were not arbitrable, because the parties did not consent to arbitration of those claims. Continue Reading Ninth Circuit Rules That Only Individual PAGA Claims Can Be Compelled to Arbitration