Rethinking Restrictive Covenants: Delaware Courts’ Movement in Favor of the Restricted

Given the latest court decisions in Delaware and the Federal Trade Commission’s announcements on restrictive covenants, it’s becoming clear that employers will need to rethink or halt their non-compete restrictions and clauses on employees when it comes to their HR policies and procedures. Although the Delaware Supreme Court has not yet weighed in on the issue, operating businesses and interested parties should take into consideration these decisions when drafting new or re-evaluating existing restrictive covenants, both in the mergers and acquisitions context and in limited liability company agreements, limited partnership agreements, and agreements with their employees.