Earlier this Fall, the Federal Trade Commission (the “Commission” or the “FTC”) officially ceded its fight to impose a nationwide ban on employee noncompete agreements (the “Noncompete Ban”).Continue Reading FTC Signals Shift to Targeted Enforcement of Non-Competes in the Healthcare Industry
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
The 2024–2025 California legislative session came to an official close at midnight on October 13, 2025, when Governor Newsom’s deadline to sign or veto bills passed by the Legislature expired. Of the approximately 917 bills passed by the Legislature, the Governor signed 794 bills into law and vetoed 123 bills. The bills signed into law include several new employment-related laws for California employers.Continue Reading California’s 2024-2025 Legislative Session Closes with a Host of New Employment Laws for 2026
The Sunshine State just got brighter for Florida employers seeking to enforce non-compete agreements. On April 24, 2025, the Florida legislature passed the Contracts Honoring Opportunity, Investment, Confidentiality, and Economic Growth (CHOICE) Act (the “Act”). The Act—which took effect on July 1, 2025—significantly enhances the enforceability of both non-compete and garden leave agreements in Florida. As a result, Florida may now be the most non-compete friendly state in the nation.Continue Reading Breaking Up Is Hard to Do: Florida’s New Non-Compete Law Shakes Up the Sunshine State
Effective July 1, 2025, Wyoming will restrict the enforceability of non-compete agreements. In enacting Senate Bill 107, Wyoming joins a growing list of states that have significantly restricted, or completely banned, non-compete agreements.Continue Reading Have Employees in Wyoming? Start Preparing for the Non-Compete Ban
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
Washington Governor Jay Inslee recently signed Senate Bill 5935 into law, amending and expanding Washington’s statute restricting the enforceability of noncompetition covenants (Revised Code of Washington 49.2). The amended statute, effective June 6, 2024 and enacted to “facilitat[e] workforce mobility and protect[] employees and independent contractors,” follows a growing trend among states restricting the enforceability of noncompetition covenants and creates additional considerations for employers entering into non-compete agreements with Washington-based employees.Continue Reading Washington’s Amended Non-Compete Law Creates New Considerations for Employers
On April 23, 2024, the Federal Trade Commission (“FTC”) issued its Final Rule banning employers from imposing post-employment noncompete requirements on their workers (the “Final Rule”). The FTC has indicated that it will continue to prioritize enforcement in the healthcare industry, with objectives seeming to include alleviating physician shortages and improving access to healthcare. What the Final Rule means for healthcare organizations generally, and for nonprofits in particular, is not entirely clear and is likely to be challenged. Continue Reading What the FTC’s Noncompete Ban Means for Healthcare
On April 23, 2024, the Federal Trade Commission (the “FTC”) voted 3-2 to issue its final rule (“Final Rule”) banning employers from imposing noncompete clauses on their workers, approving the final rule in a special Open Commission Meeting. Continue Reading FTC Votes to Ban Noncompete Agreements
In Cantor Fitzgerald, L.P. v. Ainslie, No. 162, 2023, 2024 WL 315193 (Del. Jan. 29, 2024), the Delaware Supreme Court held enforceable a “forfeiture for competition” provision in a limited partnership agreement, upholding “the freedom of contract” and enforcing “as a matter of fundamental public policy the voluntary agreements of sophisticated parties.” Given Delaware’s recent shift from its typically non-compete friendly stance, the Delaware Supreme Court’s ruling is beneficial for employers.Continue Reading Delaware Supreme Court Enforces Forfeiture for Competition Provision in Partnership Agreement
Imagine paying millions to acquire a company only to later discover the restrictive covenants in the employment agreements of high-level executives were unenforceable. That’s precisely what happened in Intertek Asset Integrity Management. In Intertek, Texas’s Twelfth Court of Appeals held a company Vice President’s non-compete was unenforceable by the purchaser-entity because the underlying employment agreement lacked an assignment clause. Such language, if included, would have permitted the seller to transfer the contract’s rights and obligations without the employee’s consent. Assignability clauses are frequently buried in the “miscellaneous” section of agreements and—too often—omitted. Businesses who overlook these terms in Texas employment contracts do so at their peril.Continue Reading Missed Assignments: The Importance of Assignability Clauses in Restrictive Covenant Agreements