Delaware continues to expand its enforcement of agreements not to compete with one’s former employer. The latest step in this path to enforcement is the recognition that a noncompete and nonsolicitation agreement may be entered into by a mere click of the “accept” button on a computer screen. The Delaware Court of Chancery just upheld such agreements in Newell Rubbermaid v. Storm, Del. Ch. C.A. 9398-VCN (March 27, 2014). The decision has serious implications for employees who may wish to quit their present jobs to pursue careers at an employer’s competitor.
The facts of Newell Rubbermaid illustrate the scope of its holding. Newell Rubbermaid gave some of its more valued employees bonuses in the form of restricted stock units, or RSUs, essentially a stock option. To be eligible for an RSU, Sandy Storm had to agree to the RSU agreement by going to a website and clicking on the “accept” button. The RSU agreement contained the nondisclosure and nonsolicitation terms that Newell Rubbermaid sought to enforce against Storm when she quit to join a competing business.
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