News & Analysis as of

Forfeiture Restrictive Covenants Employment Contract

Proskauer - Employee Benefits & Executive...

Tenth Circuit Affirms Distinction Between Forfeiture and Penalty for Competition

In Lawson v. Spirit AeroSystems, Inc., the U.S. Court of Appeals for the Tenth Circuit upheld the forfeiture of certain stock awards for violating a covenant not to compete. Like the Seventh Circuit in LKQ Corp. v....more

Troutman Pepper Locke

Restrictive Covenants Unenforceable Where Consideration Forfeited

Troutman Pepper Locke on

In North American Fire Ultimate Holdings, LP v. Alan Doorly, the Delaware Court of Chancery held that the restrictive covenants included in an incentive unit grant agreement were unenforceable when the units received by the...more

Troutman Pepper Locke

Feeling Competitive: The Reasonableness of Forfeiture-for-Competition Provisions

Troutman Pepper Locke on

In 2024, employers rushed to track the twists and turns of the Federal Trade Commission’s (FTC) noncompete ban, which attempted to limit the enforceability of agreements that restrict employees from working for a competitor...more

Epstein Becker & Green

Massachusetts High Court To Weigh In on Forfeiture-for-Solicitation Provisions in Era of Massachusetts Noncompetition Agreement...

Epstein Becker & Green on

On Monday, March 3, 2025, the Massachusetts Supreme Judicial Court (“SJC”) heard argument in Miele v. Foundation Medicine, Inc., regarding whether the Massachusetts Noncompetition Agreement Act, G. L. c. 149, § 24L (the...more

BakerHostetler

Delaware Is an Employee Choice State - It Is Official

BakerHostetler on

The Delaware Supreme Court’s ruling in Cantor Fitzgerald v. Ainslie, which reversed the Court of Chancery’s 2023 finding that forfeiture-for-competition provisions should be evaluated by the same “reasonableness” standard as...more

Seyfarth Shaw LLP

Freedom to Compete, But at a Cost: Delaware Signals Forfeiture Clauses Could Be a Viable Non-Compete Alternative

Seyfarth Shaw LLP on

The Delaware Supreme Court recently clarified that forfeiture-for-competition clauses under the Employee Choice Doctrine may be enforceable against a broader range of employees, including middle managers, not just...more

Ogletree, Deakins, Nash, Smoak & Stewart,...

Potential Impact of the FTC’s Noncompete Ban on Employee Benefits and Executive Compensation

The Federal Trade Commission’s (FTC) ban on noncompetition covenants (“noncompetes”) could significantly impact the design and administration of employee benefits and executive compensation arrangements....more

Kohrman Jackson & Krantz LLP

FTC’s Final Rule on Non-Compete Clauses: Implications & Considerations

FTC RULE BANS NON-COMPETE CLAUSES FOR NON-SENIOR EMPLOYEES - Non-compete clauses have long been a contentious issue in employment agreements, with concerns raised about their potential to stifle competition and limit...more

Spilman Thomas & Battle, PLLC

An Argument for the Use of Stock Options with Forfeiture Clauses for Breach of Duty of Loyalty

Introduction Jimmy John’s In 2014, Emily Brunner (“Brunner”) and Caitlin Turowski (“Turowski”) filed a complaint in Illinois against the sandwich company, Jimmy John’s, and its franchise affiliates. The complaint was amended...more

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