§ 1. Governing Statutory & Common Law Authority
The enforceability of non-competition agreements in Delaware is governed by Common law; 6 Del. C. § 2707 (physician non-competes). Non-competes enforceable if reasonable. Delaware courts apply a multi-factor reasonableness test.
Recent legislative developments: Sunder Energy v. Jackson (2024): Delaware Supreme Court struck down an overly broad non-compete.
§ 2. Compensation Threshold Requirements
Delaware does not impose a minimum salary threshold for non-compete enforceability. This means non-competes may be enforced against employees at any income level, including hourly and part-time workers.
§ 3. Temporal Limitations on Post-Employment Restrictions
Delaware does not codify a maximum duration. Courts typically uphold 1-2 years. In practice, 1-2 years is generally considered the outer limit of reasonableness, though outcomes vary significantly based on the employee's role and access to trade secrets.
§ 4. Judicial Modification (Reformation Doctrine)
Delaware follows the reformation doctrine, granting courts broad authority to rewrite overbroad non-compete terms. This is the most employer-favorable approach — even a poorly drafted agreement may be reshaped into an enforceable restriction.
§ 5. Consideration & Contract Formation
Continued employment generally sufficient. Whether this is legally sufficient — especially for agreements presented mid-employment rather than at hiring — is frequently contested.
§ 6. Effect of Involuntary Termination
Termination without cause is a factor courts weigh. Courts may apply heightened scrutiny when the employer initiated the termination, particularly for termination without cause or mass layoffs.
Practitioner Notes
Delaware is the state of incorporation for many companies, so choice-of-law issues are common.