The Delaware Supreme Court has declined to enforce a noncompete agreement against a company founder who joined a competitor. This ruling raises concerns about Delaware's status as a preferred incorporation destination, especially as it allows a plaintiff with only nine shares to challenge decisions made by the board and approved by shareholders. Critics argue that this could undermine the state's longstanding dominance in corporate law. The case follows other recent developments, including a Chancery Court decision that blocked Tesla's executive pay package for Elon Musk, suggesting a potential shift in the legal landscape for business operations in Delaware.
Delaware Supreme Court Refuses to Enforce Noncompete Against Company Founder Who Joined Competitor https://t.co/gfMFeQwtRe
Delaware has dominated corporate formations for a generation, but recent developments -- including the Chancery Court blocking Tesla's pay package for Elon --may threaten DE's monopoly. To provide founders with more options, Cooley is announcing that we have updated our…
Delaware Supreme Court Refuses to Enforce Noncompete Against Company Founder Who Joined Competitor https://t.co/oQitvvXxHu @FirstStateUp1 #noncompetes #delawarelaw #litigation https://t.co/oSLMIZTzVo