USA Trends and Developments Contributed by: Dawn Mertineit, Michael Wexler and Marcus Mintz, Seyfarth Shaw LLP
compete bans; it remains to be seen whether any such attempts will prove successful. While the vast majority of legislative activity has focused on limiting employers’ ability to impose or enforce restrictive covenants, some states have moved in the opposite direction. For example, Florida recently enacted the “CHOICE Act”, which bolsters its already employer-friendly laws. The statute permits employers to (i) retain employees during a lengthy, paid “notice period”, effectively sidelining them from competitive employment while continuing to pay wages and benefits, and/or (ii) implement certain non- competes lasting up to four years. This development marks a notable departure from broader state trends that increasingly favour employee mobility. While most states are likely to continue limiting restrictive cov - enant enforceability, others may follow Florida’s lead. Against this already confusing backdrop of state-spe - cific legislation, recent trends in judicial enforcement are also changing the landscape for employers seek - ing to protect their trade secrets through restrictive enforcement. For example, many courts have held that non-competes that prohibit an individual from joining a competitor in any capacity whatsoever likely violate the so-called janitor rule and are generally overbroad and unenforceable. See, eg, Med-1 Sols., LLC v Tay- lor , 2024 WL 4876906, *8 (Ind. Ct. App. Nov 25, 2024) (non-competes prohibiting work for a competitor “in any capacity”, even as a security officer or custodian, are unreasonable and unenforceable “because they extend beyond the scope” of any legitimate interests). Similarly, in Delaware, despite the well-established public policy favouring “freedom of contract”, the Delaware Chancery Court has continued its trend of sharply limiting enforcement of restrictive covenants. While Delaware historically supported a “reformation” approach to limiting overbroad covenants, pursu - ant to which a court could modify the relevant cov - enants to narrow their scope or otherwise render them enforceable, in recent years the Delaware Chancery Court has refused to enforce any portion of an over - broad covenant, even where the offending conduct would fall squarely within the portion of a covenant that is reasonably narrow. Despite this, the Delaware Supreme Court has continued to issue decisions
upholding certain covenants, and at times reversing the Chancery Court’s decisions. For example, the Delaware Supreme Court has upheld forfeiture-for- competition provisions in multiple cases in the last few years, including a ruling that such provisions are not subject to the “reasonableness” review typically applied to restrictive covenants. See Hub Grp., Inc. v Knoll , 2024 WL 3453863, at *1 (Del. Ch. 18 July 2024) (refusing to modify an overbroad covenant, and noting that blue-penciling risks a “perverse incentive towards overbreadth or lack of clarity” and citing Kodiak Bldgs. Partners, LLC v Adams , 2022 WL 5240507, at *5 (Del. Ch. Oct. 6, 2022), a sale of business case); Fortiline, Inc. v McCall , 2024 WL 4088629, at *4 (Del. Ch. Sept. 5, 2024) (similarly refusing to judicially modify an over - broad-as-drafted covenant, and opining that blue- penciling “supports a regime of ‘sprawling restrictive covenants’”) (citing Kodiak and Sunder Energy, LLC v Jackson , 305 A.3d 723, 746 (Del. Ch. 2023)). In a similar vein, Massachusetts’ highest court con - firmed in 2025 that the state’s 2018 non-compete statute – which includes strict requirements for non- compete enforcement – does not apply to non-solic - its, even those accompanied by a forfeiture. See Miele v Foundation Medicine, Inc. , 496 Mass. 171 (2025). On the other hand, a Massachusetts Superior Court recently interpreted the 2018 statute to permit non- competes in the employment context only if they are between the employee and the specific employer – foreclosing enforcement of covenants with a cor - porate parent (as is common in equity agreements). See Anaplan Parent, LP v Brennan , Case No 2584-cv- 02350 (Suffolk Superior Court, Massachusetts). In sum, it is more important than ever for employers to ensure their restrictive covenants are compliant with governing law and reasonably limited in scope to pro - tect legitimate business interests to ensure enforce - ability. Trade Secret Trends Against this backdrop, trade secret protection and related litigation remain a top priority for businesses with operations in the United States, as trade secrets are often among a company’s most valuable assets. In fact, trade secret misappropriation costs American businesses approximately USD300 billion annually,
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