Delaware Chancery Court Declines to Blue-Pencil Overly Broad Noncompete Agreement; Casts Doubt on Choice of Law Provisions

A recent Delaware Chancery Court opinion has elucidated Delaware’s approach to judicially modifying, or “blue-penciling,” overly broad noncompete agreements and deferring to parties’ choice of law provisions. The case, FP UC Holdings, LLC, et al. v. James W. Hamilton, Jr., et al., C.A. No. 2019-1029-JRS (Del Ch. Mar. 27, 2020), highlights the importance of drafting well-tailored restrictive covenants, and shows that even in Delaware – where employers often have been reassured by the safe harbor of courts’ relative willingness to blue-pencil problematic agreements and apply Delaware law to fact patterns that have developed in other states – employers must make careful drafting and choice of law decisions. It also emphasizes that if an employer’s intent is to litigate in Delaware, the employer should do so from the beginning, without acquiescing to another court’s jurisdiction.

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Delaware Joins Growing List of States Passing Anti-Harassment Legislation

Delaware is the latest state to mandate that employers provide anti-harassment training to employees. Delaware joins New York, California, Connecticut, and Maine as states that require employers to provide such training. The new law amends the Delaware Discrimination in Employment Act (“DDEA”), and takes effect on January 1, 2019.

While the DDEA already prohibited discrimination based on sex, the recent amendments are devoted to prevention of sexual harassment in the workplace. The new law amends the DDEA to define sexual harassment and provides the same process used for Title VII violations with regard to exhaustion of administrative remedies prior to filing a private lawsuit.

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