Once considered a reliable “go-to” state for enforcing noncompetes and nonsolicitation agreements, Delaware is now a minefield of unpredictability. Historically, if a noncompete’s geographic, temporal or business activity scope was too broad, Delaware courts used the “blue-pencil” doctrine1 to render them reasonable and enforceable. Those days are largely gone. Blue-penciling is not a reliable safety net for employers in the First State. Today, Delaware courts are more likely to strike overly broad restrictions than to rewrite them, exposing employers to competitive risks if their agreements are not precisely tailored or carefully crafted.
Something is Afoot in the First State
Delaware’s reputation as the jurisdiction of choice for business is rooted in its robust and employer-friendly corporate laws. It is a “contractarian state,” meaning its courts respect and enforce the bargains struck by parties – whether in employment, merger, stock or partnership agreements – so long as those bargains are not unconscionable or contrary to public policy. This contractarian philosophy has long offered businesses predictability and reliability, making Delaware a preferred state of incorporation.