Delaware Non-Compete Agreement

Q: Are non-compete agreements enforceable in Delaware?

Usually yes for employees, but only a reasonable covenant will hold. Delaware has no non-compete statute, so the Delaware Court of Chancery decides the question under common law. It enforces a restraint only when the duration, geographic scope, and restricted activity are reasonable, the covenant is no broader than needed to protect a legitimate business interest, and it passes a balancing of the equities. An overbroad or unnecessary restraint is unlikely to survive. Physician non-competes are void by statute.

Q: How long can a non-compete last in Delaware?

Delaware sets no statutory maximum, because the Court of Chancery measures reasonableness rather than counting years. As a practical matter, the court is more likely to accept a restriction of roughly one to two years for an employee, while a longer term is easier to defend when the covenant is tied to the sale of a business and the buyer is protecting acquired goodwill. Whatever the length, it has to line up with the legitimate interest the employer is actually protecting.

Q: Is there a salary or wage threshold for non-competes in Delaware?

No. Delaware has never fixed a minimum salary or income an employee must earn before a non-compete can apply, unlike several states that gate non-competes on a wage floor. Here the Court of Chancery asks whether the restraint is reasonable, not how much the worker was paid. That said, when the court weighs the equities it tends to be more skeptical of a covenant imposed on a lower-wage or less-sophisticated employee with little bargaining power. Never carry over another state's wage figure.

Q: What makes a non-compete reasonable in Delaware?

The Court of Chancery generally looks for three things: a reasonable time period, a geographic scope no wider than where the employer actually does business, and a restraint that protects a legitimate interest such as trade secrets, confidential information, or customer goodwill and stops there. On top of that, the court weighs the hardship on the employee and the public interest. A nationwide bar rarely survives unless the employer can show a truly national reach. These are case-law tendencies, not guarantees.

Q: Are non-competes for physicians enforceable in Delaware?

No. Under 6 Del. C. Section 2707, any covenant not to compete in an employment, partnership, or corporate agreement between physicians that restricts a physician's right to practice medicine in a particular locale or for a defined time after the agreement ends is void. The rest of the agreement can still be enforced, including a clause requiring payment of damages reasonably related to the injury from termination, which may include damages related to competition. This is Delaware's sharpest statutory line on non-competes.

Q: Will a Delaware court narrow an overbroad non-compete or strike it?

It may well strike it outright. Delaware courts once could blue-pencil, meaning trim an overbroad covenant down to something reasonable, but recent Court of Chancery rulings have increasingly refused to rewrite such restraints and have voided them in whole, on the view that reformation just rewards employers for overreaching. So a party should not count on a Delaware court to rescue an unreasonable non-compete by editing it. The safe move is to draft the restraint narrowly at the outset.

Q: What consideration is needed for a non-compete in Delaware?

Delaware requires valid consideration for a non-compete to stand. If the employee signs at the start of the job, the offer of employment generally supplies it. For a covenant added partway through employment, Delaware courts have sometimes accepted continued at-will employment, but that is fact-specific, so additional consideration such as a raise, bonus, promotion, or equity grant makes a mid-employment non-compete considerably more defensible. Delaware imposes no statutory advance-notice period before an employee signs.

Q: Does the FTC non-compete rule change anything in Delaware?

No. The Federal Trade Commission issued a 2024 rule that would have banned most non-competes nationwide, but a federal court set it aside before it took effect, so it is not in force and its status has stayed unsettled. Either way, Delaware runs on its own rules: the Court of Chancery reasonableness test and the physician statute (6 Del. C. Section 2707) continue to govern non-competes here, so the federal rule's fate does not change Delaware law today.

Delaware has no non-compete statute; the Court of Chancery decides enforceability under common law. No wage threshold, and physician non-competes are void. Attorney review available.

Introduction

Delaware stands apart from most states: it has no general statute setting the rules for employee non-competes. Whether a covenant binds a departing worker is decided instead by the Delaware Court of Chancery under common law, the same equity court known nationally for corporate disputes. That court will enforce a non-compete only where it is reasonable in duration, in geographic reach, and in the activity it restrains, reaches no further than necessary to guard a legitimate business interest such as trade secrets, confidential information, or customer goodwill, and survives a weighing of the hardships on each side against the public interest. A non-compete agreement, at bottom, is a contract in which one person, usually an employee, promises not to compete with a business for a fixed period within a fixed area once the working relationship ends. Because Delaware's tests come from case law rather than bright-line numbers, the result for any given clause is fact-specific, and the Court of Chancery has looked hard at employment restraints in recent years. Two points are firmer. A covenant that restricts a physician's right to practice medicine is void by statute under 6 Del. C. Section 2707, and Delaware fixes no salary or income floor for a non-compete to be valid, so no other state's wage number carries over. Because many out-of-state employers choose Delaware law under 6 Del. C. Section 2708, the Chancery reasonableness test reaches well past in-state hires. Where a restraint would go too far, Delaware employers guard confidential information instead through the Delaware Uniform Trade Secrets Act (6 Del. C. Section 2001 et seq.), usually alongside a confidentiality agreement. This page lays out Delaware's approach and offers a template scoped to its reasonableness limits. It is a state-law overview, not a promise that any particular clause will hold.

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Key Things to Know

1
Delaware has no general non-compete statute. A covenant's fate is decided by the Delaware Court of Chancery under common law, which upholds an employee restraint only when it is reasonable in duration, area, and activity and reaches no further than needed to protect a legitimate business interest.
2
A non-compete is a contract in which one party, usually an employee, agrees not to compete with a business for a set time and area after the relationship ends. In Delaware such a covenant binds a former worker only if a court finds it reasonable on the facts.
3
No salary or income threshold applies in Delaware. Where some states permit non-competes only above a wage floor, enforceability here turns entirely on reasonableness, not on pay. Courts weighing the equities do tend to look harder at covenants pressed on lower-wage workers who had little bargaining power.
4
As a rule of thumb, Delaware courts treat roughly one to two years as more likely reasonable for an employee, expect a geographic scope tied to where the employer actually competes, and confine the restraint to trade secrets, confidential information, or customer relationships. A nationwide bar rarely survives without a genuinely national business reach.
5
Consideration matters in Delaware. A job offer generally backs a covenant signed at hire; for someone already employed, added consideration such as a raise, bonus, promotion, or equity makes a mid-employment covenant far more defensible than continued at-will employment on its own. There is no statutory advance-notice period.
6
Physicians are the clearest carve-out: a covenant restricting a physician's right to practice medicine is void under 6 Del. C. Section 2707. And rather than trimming an overbroad restraint, recent Court of Chancery decisions have increasingly struck such covenants whole instead of rewriting them.
7
To lock down confidential information without an overbroad bar, Delaware employers lean on the Delaware Uniform Trade Secrets Act (6 Del. C. Section 2001 et seq.), usually through a confidentiality or non-disclosure agreement. It shields trade secrets and customer data without dictating where a former employee may work.

Key decisions before you file

Before you file a Non-Compete Agreement in Delaware, a few decisions shape the document: which option to choose and what each one means. The Non-Compete Agreement guide walks through them.

Open the Non-Compete Agreement guide

Customize your Non-Compete Agreement Template with DocDraft

DELAWARE COVENANT NOT TO COMPETE (Employee non-compete, scoped to Delaware Court of Chancery reasonableness limits)

IMPORTANT DELAWARE NOTICE: Delaware has no general non-compete statute. The Delaware Court of Chancery decides under common law whether an employee covenant is enforceable, and it will do so only when the restraint is reasonable in duration, geographic scope, and the activity restrained and is no broader than needed to protect a legitimate business interest. Delaware sets no wage threshold. A covenant that restricts a physician's right to practice medicine is VOID under 6 Del. C. Section 2707, so do not use this as a physician non-compete. Because the Court of Chancery increasingly refuses to rewrite an overbroad restraint, draft this narrowly from the start. To guard confidential information, pair this with a confidentiality agreement under the Delaware Uniform Trade Secrets Act (6 Del. C. Section 2001 et seq.).

PARTIES. This Covenant Not to Compete is made on [DATE] between [EMPLOYER NAME] (Company) and [EMPLOYEE NAME] (Employee).
CONSIDERATION. This covenant is supported by [the offer of employment / a raise, bonus, promotion, equity, or other benefit described here]. The parties agree the consideration is valid and bargained for.
LEGITIMATE BUSINESS INTEREST. The Company entrusts the Employee with [trade secrets, confidential information, customer relationships, or goodwill]. This covenant protects only those interests and reaches no further.
COVENANT. For [REASONABLE PERIOD, e.g. 12 months] after the Employee's employment ends, the Employee will not [engage in the specific competing activity] within [GEOGRAPHIC AREA where the Company actually competes]. The restraint is confined to the interests named in Section 3.
NON-SOLICITATION. For the same period, the Employee will not solicit the Company's [customers / employees] with whom the Employee worked or about whom the Employee learned confidential information.
CONFIDENTIALITY AND TRADE SECRETS. The Employee will not use or disclose the Company's confidential information or trade secrets, consistent with the Delaware Uniform Trade Secrets Act (6 Del. C. Section 2001 et seq.). This duty stands apart from, and outlasts, the covenant above.
GOVERNING LAW AND REASONABLENESS. Delaware law governs this agreement, a choice Delaware honors under 6 Del. C. Section 2708. The parties intend every restraint to be reasonable in time, area, and scope. If a court finds any restraint unreasonable, the parties acknowledge a Delaware court may decline to narrow it and may instead refuse to enforce it.

[EMPLOYER NAME] [EMPLOYEE NAME]

Signature and date Signature and date

Note: Delaware enforces employee non-competes only when they are reasonable in duration, geographic scope, and activity and tied to a legitimate business interest, under Court of Chancery common law rather than any statute. There is no wage threshold. Physician non-competes are void (6 Del. C. Section 2707). A Delaware court may refuse to reform an overbroad covenant. Attorney review is available before you rely on any non-compete in Delaware. For the generic template and other states, see the full Non-Compete Agreement template hub.

Delaware Requirements for Non-Compete Agreement

Common Law, Not a Statute
Delaware has no general non-compete statute. The Delaware Court of Chancery decides enforceability under common law, upholding an employee covenant only when it is reasonable in duration, geographic scope, and the activity restrained, is no broader than needed to protect a legitimate business interest, and passes a balancing of the equities. Whether any clause holds up is fact-specific.
No Income Threshold
Delaware fixes no salary or income floor that makes a non-compete valid. Where several other states gate non-competes on a wage threshold, enforceability here turns on reasonableness, not pay. When the Court of Chancery weighs the equities it tends to scrutinize covenants pressed on lower-wage workers with little bargaining power. Never carry over another state's salary figure for a Delaware worker.
Reasonableness Test
The Court of Chancery generally expects a reasonable duration (often around one to two years for employees), a geographic scope tied to where the employer actually competes, and a restraint confined to trade secrets, confidential information, or customer goodwill. A nationwide bar rarely survives absent a genuinely national business reach. These are case-law tendencies, not guarantees.
Consideration Required
A Delaware non-compete needs valid consideration. A job offer generally backs a covenant signed at hire; for someone already employed, added consideration such as a raise, bonus, promotion, or equity makes a mid-employment covenant more defensible than continued at-will employment alone. Delaware imposes no statutory advance-notice period before signing.
Physician Non-Competes Are Void
Under 6 Del. C. Section 2707, any covenant not to compete in an employment, partnership, or corporate agreement between physicians that restricts a physician's right to practice medicine in a particular locale or for a defined time after the agreement ends is void. Other provisions remain enforceable, including a clause requiring payment of damages reasonably related to the injury from termination, which may include damages related to competition.
Courts May Refuse to Blue-Pencil
Delaware courts once could blue-pencil, meaning trim an overbroad covenant, but recent Court of Chancery decisions have increasingly refused to rewrite overbroad restraints and have voided them whole instead. Do not assume a Delaware court will rescue an unreasonable non-compete by editing it; draft the restraint narrowly from the start.
Protect Trade Secrets Instead
To guard confidential information without an overbroad bar, Delaware employers rely on the Delaware Uniform Trade Secrets Act (6 Del. C. Section 2001 et seq.), usually through a confidentiality or non-disclosure agreement. It shields trade secrets and customer data without dictating where a former employee may work, and it is the recommended route where a non-compete would be unreasonable or void.
Federal FTC Rule Is Not in Force
The 2024 Federal Trade Commission non-compete rule was set aside by a federal court before it took effect, so it is not currently binding, and its status remains unsettled. Delaware does not lean on it: the Court of Chancery reasonableness test and the physician statute (6 Del. C. Section 2707) keep governing non-competes here whatever becomes of the federal rule.

Frequently Asked Questions

Are non-compete agreements enforceable in Delaware?

How long can a non-compete last in Delaware?

Is there a salary or wage threshold for non-competes in Delaware?

What makes a non-compete reasonable in Delaware?

Are non-competes for physicians enforceable in Delaware?

Will a Delaware court narrow an overbroad non-compete or strike it?

What consideration is needed for a non-compete in Delaware?

Does the FTC non-compete rule change anything in Delaware?

Introduction

Key Things to Know

Key decisions before you file

Customize your Non-Compete Agreement Template with DocDraft

Delaware Requirements for Non-Compete Agreement

Common Law, Not a Statute

No Income Threshold

Reasonableness Test

Consideration Required

Physician Non-Competes Are Void

Courts May Refuse to Blue-Pencil

Protect Trade Secrets Instead

Federal FTC Rule Is Not in Force

Frequently Asked Questions