Delaware Supreme Court Revives Nationwide Noncompete Case Following Dismissal
In a significant decision, the Delaware Supreme Court reversed the dismissal of Payscale, Inc.’s breach of contract claims arising from Erin Norman’s alleged violations of the noncompete, non-solicitation, and confidentiality provisions contained in the incentive equity agreement that she signed as an employee. The decision reaffirms: (1) nationwide, 18-month noncompetes may be enforceable when they are sufficiently tied to an employer’s articulated economic interests, (2) contingent equity awards are legally sufficient consideration for restrictive covenants , and (3) a plaintiff may plead circumstantial allegations to support claims for breach of non-solicitation and confidentiality provisions. Background Norman entered into an incentive equity agreement that included noncompete, non-solicitation, and confidentiality provisions. In exchange, she received “Profit Interest Units” (PIUs) in Payscale’s parent holding company. At the time, the PIUs were valued at $0, but the PIUs would v...