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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