Delaware Non-Compete Laws (2026): Are Non-Competes Enforceable?

Delaware has no general statute on employee non-competes, so most non-competes are judged under court-made law: a Delaware court reviews the covenant for reasonableness and balances the equities. The one statutory exception covers physicians. Under 6 Del. C. 2707, a covenant that restricts a physician's right to practice medicine in a particular locale or for a defined period after the agreement ends is void.

The leading recent decision is Sunder Energy, LLC v. Jackson (Del. Dec. 10, 2024), in which the Delaware Supreme Court affirmed a refusal to rewrite overbroad covenants. For how other states handle these agreements, see our non-compete laws by state guide.

Information last verified on 2026-10-08. This article has not been reviewed by a licensed lawyer.

Jurisdiction scope: This article covers Delaware law on covenants not to compete: 6 Del. C. 2707 (physicians), 6 Del. C. 2708 (choice of Delaware law), and Delaware Supreme Court decisions from 2024, with a short note on the federal FTC rule. It does not cover trade-secret claims (see Delaware trade secret laws) or severance agreements (see Delaware severance pay laws).

Are non-competes enforceable in Delaware?

They can be, outside medicine. Our research read all of subchapter I of 6 Del. C. chapter 27 (sections 2701 through 2708) and found only one section on non-competes, the physician rule in section 2707. For everyone else, the rule comes from the courts.

In Sunder Energy, the Delaware Supreme Court said Delaware courts review non-compete and non-solicit agreements to ensure they are "(i) reasonable in geographic scope and temporal duration, (ii) advance legitimate economic interests of the party seeking enforcement, and (iii) survive a balancing of the equities." The Delaware Supreme Court, quoting its earlier decision in Cantor Fitzgerald, L.P. v. Ainslie, 312 A.3d 674 (Del. 2024), referred to "the strong policy interest that justifies the review of unambiguous contract provisions for reasonableness and a balancing of the equities."

That means a Delaware non-compete is not enforced simply because the employee signed it. A court looks at whether the restriction is reasonable in scope and length, whether it protects a legitimate economic interest of the employer, and whether the balance of the equities favors enforcement.

Physicians: non-competes are void by statute

Delaware's only non-compete statute protects physicians. 6 Del. C. 2707 provides:

"Any covenant not to compete provision of an employment, partnership or corporate agreement between and/or among physicians which restricts the right of a physician to practice medicine in a particular locale and/or for a defined period of time, upon the termination of the principal agreement of which the said provision is a part, shall be void; except that all other provisions of such an agreement shall be enforceable at law, including provisions which require the payment of damages in an amount that is reasonably related to the injury suffered by reason of termination of the principal agreement. Provisions which require the payment of damages upon termination of the principal agreement may include, but not be limited to, damages related to competition."

So although a physician cannot be barred from practicing, the agreement may still require the physician to pay damages, including damages related to competition, reasonably related to the injury from ending the agreement.

Two limits are worth noticing. First, the text covers agreements "between and/or among physicians," and it addresses only physicians, not other health-care workers. Second, the statute keeps the rest of the agreement alive, including a clause requiring damages reasonably related to the injury from ending the agreement, which may include damages related to competition.

Our research did not check Delaware's Title 24 (professions) or Title 19 (labor) for any separate rule on nurses, physician assistants or other professionals, so this page states no rule for them.

What happens to an overbroad non-compete

Delaware has no statute telling a court whether to narrow an overbroad covenant, and the Delaware Supreme Court has declined to set one rule. In Sunder Energy, an employer asked the courts to blue-pencil (cut down) restrictive covenants in an LLC agreement. The Court of Chancery refused because the covenants were facially unreasonable, and the Supreme Court affirmed that refusal.

The Supreme Court also declined to adopt a bright-line test for when blue-penciling is appropriate. It wrote: "We do not view this case as the appropriate vehicle to create such a rule," and added, "We are hesitant to establish policy-based rules that have not been considered by the General Assembly."

Delaware courts do have discretion to blue-pencil. Sunder Energy notes they have used it where the circumstances indicate roughly equal bargaining power, such as where the covenant language was specifically negotiated, valuable consideration was exchanged for the restriction, or the covenant came with the sale of a business. The court said the case before it "did not carry any of those hallmarks," so the Court of Chancery declined to narrow the covenants, and the Supreme Court affirmed. A negotiated, well-compensated covenant therefore stands a better chance of being narrowed than a take-it-or-leave-it form.

Forfeiture-for-competition clauses

Some agreements do not forbid competing outright. Instead, the employee loses a benefit, such as deferred pay or equity, if they go to work for a competitor. Delaware treats those differently.

In LKQ Corp. v. Rutledge (Del. Dec. 18, 2024), answering questions certified by the Seventh Circuit, the Delaware Supreme Court advised that "Cantor Fitzgerald is not restricted to the limited partnership context." Under that approach, known as the employee choice doctrine, a forfeiture-for-competition provision is treated as an enforceable contract term, subject to ordinary contract defenses, rather than reviewed for reasonableness.

The distinction matters: a covenant enforced by an injunction gets a reasonableness review, while a clause that only takes back a benefit if you compete, including a claw-back of restricted stock units, generally does not. The court left open whether a claw-back so extreme in duration and financial hardship that it leaves an unsophisticated employee no real choice should still be reviewed for reasonableness.

Choosing Delaware law or a Delaware court

Some agreements say Delaware law governs them. 6 Del. C. 2708 lets contracting parties agree in writing that Delaware law governs, but subsection (c)(2) says the section does not apply to a contract "involving less than $100,000." A Delaware choice-of-law clause in a smaller agreement therefore does not get the support of that statute.

In Sunder Energy, the Court of Chancery voiced concern about employers choosing Delaware as a forum while other jurisdictions reject such covenants, and the Supreme Court noted comity concerns. The Supreme Court also affirmed that Utah law, not Delaware law, governed a tortious interference claim in the case. Our research found no Delaware statute that forbids out-of-state choice-of-law or forum clauses for Delaware workers.

Delaware statutes, bills and what our research could not confirm

Our research did not verify Delaware rules on the following, so this page states no rule on any of them:

• a minimum salary or exempt-status threshold for employee non-competes;
• any required notice period, consideration rule, maximum duration or geographic limit;
• whether being fired or laid off affects enforcement (for the state's at-will rule, see Delaware at-will employment laws);
• a statutory penalty or employee remedy for an employer that tries to enforce a void or overbroad covenant;
• separate statutory rules for customer non-solicitation agreements, no-poach clauses or confidentiality agreements;
• Court of Chancery decisions after Sunder Energy;
• any 2025-2026 non-compete bill in the General Assembly. The bill index could not be searched, and two web searches surfaced none, which is weak evidence only.

We did not identify a state agency that handles non-compete complaints; disputes go to the courts.

The FTC rule and Delaware non-competes

The FTC's nationwide non-compete rule never took effect. A federal court in Texas set it aside on August 20, 2024 (Ryan, LLC v. FTC, No. 3:24-CV-00986-E, N.D. Tex.), the FTC voted on September 5, 2025 to dismiss its appeals, and the FTC removed the rule from the Code of Federal Regulations on February 12, 2026. The FTC still acts case by case; on June 22, 2026 it approved a final order requiring a pest-control company to stop enforcing non-competes. Delaware law therefore supplies the rule. More detail: FTC non-compete ban struck down and our non-compete laws by state guide.

Non-competes and trade secrets

A non-compete is a contract term; trade-secret law protects confidential business information whether or not an employee signed a covenant. See Delaware trade secret laws.

If you have been asked to sign

Because Delaware courts test reasonableness, balance the equities and may refuse to narrow an overbroad covenant, how a particular agreement fares depends on its length, territory, the work it restricts, any forfeiture terms and the law it chooses. A lawyer licensed in Delaware can review a specific agreement against those points.

Related

• Non-compete laws by state
• Delaware trade secret laws
• Delaware severance pay laws
• Delaware at-will employment laws
• FTC non-compete ban struck down

Disclaimer: This article provides general legal information about Delaware non-compete law under 6 Del. C. 2707 and 2708 and Delaware Supreme Court decisions, not legal advice. The information was last verified on 2026-10-08. Delaware non-compete disputes are decided by the courts; for advice about a specific agreement, contact a legal aid office or a lawyer licensed in Delaware.

Last updated: 2026-10-08.

Frequently Asked Questions

Are non-competes enforceable in Delaware?

They can be. Delaware has no general employee non-compete statute, so courts review each covenant for reasonableness and balance the equities, as the Delaware Supreme Court described in Sunder Energy, LLC v. Jackson (2024).

Are physician non-competes legal in Delaware?

No. Under 6 Del. C. 2707, a covenant restricting a physician's right to practice medicine in a locale or for a period after the agreement ends is void, though other provisions remain enforceable, including damages reasonably related to the injury from termination, which may include damages related to competition.

Will a Delaware court blue-pencil an overbroad non-compete?

Not necessarily. Delaware courts have discretion to blue-pencil and have used it where the covenant was specifically negotiated, valuable consideration was exchanged for it, or it came with the sale of a business. In Sunder Energy (Del. Dec. 10, 2024), none of those factors was present, and the Delaware Supreme Court affirmed a refusal to blue-pencil facially unreasonable covenants and declined to adopt a bright-line rule.

Is there a salary threshold for Delaware non-competes?

Our research found none. No Delaware statute it read sets an income or exempt-status threshold for employee non-competes.

Does a Delaware choice-of-law clause always apply?

Not always. 6 Del. C. 2708 supports written choice of Delaware law, but it does not apply to contracts involving less than $100,000.

What is a forfeiture-for-competition clause in Delaware?

It takes back a benefit if you compete rather than barring you from competing. In LKQ Corp. v. Rutledge (Del. 2024), the court treated such clauses as ordinary contract terms that generally are not reviewed for reasonableness, though it left open whether an extreme claw-back imposed on an unsophisticated employee should be.

Does the FTC non-compete ban apply in Delaware?

No. A federal court set the FTC rule aside on August 20, 2024, and the FTC removed it from the Code of Federal Regulations on February 12, 2026.