The Delaware Court of Chancery declined to rely on a Delaware forum selection clause contained in an agreement that a former executive never received, denying a preliminary injunction in a restrictive covenant dispute involving a private equity-backed telecommunications company.
In GI DI Rushmore Parent L.P. v. Donald E. Stoops, Jr., the court found that the company sought to rely on a Delaware forum clause contained in a partnership agreement that had never been provided to the employee, despite later attempting to enforce restrictive covenants tied to an equity incentive award.
The ruling addresses a growing legal issue for employers and private equity-backed businesses that use equity incentive arrangements to impose post-employment restrictions. It also examines when employment-related disputes involving restrictive covenants should be governed by local employment laws rather than the internal governance rules of a Delaware entity.
For employers, the decision highlights a practical enforcement risk. Restrictive covenants may appear enforceable when drafted, but enforcement can become significantly more difficult if an organisation cannot show that employees received and had access to the agreements on which those restrictions depend.
The dispute arose after Donald Stoops left Bluepeak and joined competitor Dobson Fiber. Holdco sought to enforce restrictive covenants contained in an incentive unit agreement linked to an equity award and argued...
ABU DHABI: The Public Prosecution has expanded investigation into the publication and circulation of a false report claiming explosions heard in central Dubai. Counsellor Dr Hamad Saif Al Shamsi, ...