Story perspectives

Delaware Courts Strike Down Noncompete Forfeiture Clauses

11/25/2025

Summary

Story summary

Delaware courts hold that forfeiture-upon-competition clauses in noncompetes lack consideration, rendering them unenforceable in Payscale Inc. v. Norman and The Imagine Group v. Biscanti.
The cases render the noncompete provisions unenforceable due to forfeiture of profit interest units.
These decisions build on the Delaware Supreme Court's 2024 LKQ Corp v. Rutledge ruling upholding employee forfeiture provisions.
As the landscape evolves, employers may revise restrictive covenants while appeals proceed.

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Story summary

Delaware courts hold that forfeiture-upon-competition clauses in noncompetes lack consideration, rendering them unenforceable in Payscale Inc. v. Norman and The Imagine Group v. Biscanti.
The cases render the noncompete provisions unenforceable due to forfeiture of profit interest units.
These decisions build on the Delaware Supreme Court's 2024 LKQ Corp v. Rutledge ruling upholding employee forfeiture provisions.
As the landscape evolves, employers may revise restrictive covenants while appeals proceed.