Over the past six months, the Delaware Court of Chancery has issued a series of decisions narrowing the scope of permissible non-compete agreements, while declining to “blue pencil”.
In drafting restrictive covenants, acquiring companies should be aware that courts may not necessarily uphold, or even "blue pencil", restrictive covenants imposed on sellers in an acquisition.
In Kodiak Building Partners, LLC v. Adams, 2022 Del. Ch. LEXIS 288 (October 6, 2022) (Kodiak), the Court of Chancery denied the plaintiff’s motion for a preliminary injunction to.
In drafting restrictive covenants, acquiring companies should be aware that courts may not necessarily uphold, or even "blue pencil" (revise overbroad restrictive covenants),.
The Delaware Court of Chancery (the Court) has raised eyebrows with a recent decision, in the case of Kodiak Building Partners, LLC v. Adams, to strike down a noncompetition covenant.