Will the Delaware Courts Enforce Your Non-Compete Agreement?
From time to time, Delaware business owners are faced with the decision whether to file a lawsuit against a former employee who appears to be violating a non-compete clause in their employment contract. A typical non-compete clause might say: “Employee agrees that during his employment and for a period of one year thereafter, he will not directly or indirectly engage in the same business as Employer nor will he in any way be connected with (whether as owner, employee, partner, stockholder, director, member, or otherwise) any company which competes with the business of Employer within a 50 mile radius of Wilmington, Delaware.”
Having been involved in these cases on behalf of both employers and employees, I can tell you that the courts here in Delaware generally base their decisions on 2 major questions: (1) is the non-compete agreement enforceable, and (2) if it is enforceable, has the non-compete agreement been breached?
If the court finds that there has been a breach of the non-compete agreement, another issue has to do with the remedy. In other words, will the court order the former employee to stop competing, or will the court simply award money damages to the former employer?
In my next article, I’ll address the first question: is the non-compete agreement enforceable?
