Delaware Supreme Court Weighs Enforceability of Noncompete Agreements After Forfeiture of Equity Shares
The Supreme Court of the State of Delaware is considering a case regarding whether a former executive’s noncompete and nonsolicitation agreements, which were agreed to in exchange for company shares, remain enforceable if those shares have been forfeited due to violations of the agreements. The case could answer questions about the enforceability of restrictive covenants under Delaware law when the restricted party no longer enjoys the benefits of the incentives or consideration offered to enter restrictive covenants.