Delaware Non-Compete Agreement
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Delaware Legal Requirements
Key DE statutes and obligations that apply to your non-compete agreement.
Requirements
- Delaware's non-compete law is governed by statute (House Bill 84, effective August 1, 2022) and common law
- For employees earning less than $100,000/year: non-compete agreements are VOID and unenforceable
- For employees earning $100,000/year or more: non-competes are enforceable if reasonable in scope and duration
- Maximum enforceable duration for employment non-competes: 2 years
- Sale-of-business non-competes: Delaware law is more permissive — courts apply reasonableness test without the salary threshold
- Agreement must be in writing and supported by consideration
Restrictions & Limits
- Cannot enforce a non-compete against a Delaware employee earning less than $100,000/year regardless of where the contract was signed
- Healthcare providers: non-competes may face additional public policy scrutiny given patient continuity concerns
- The $100,000 threshold applies to base salary — bonuses and other compensation may or may not count depending on the agreement
Official Statute References
Primary Delaware statutes governing this document type.
Delaware Non-Compete Agreement FAQ
Common questions about non-compete agreements under Delaware law.
When did Delaware's non-compete law change?
Delaware's House Bill 84 took effect August 1, 2022. It made post-employment non-compete agreements void and unenforceable for employees earning less than $100,000 per year. The law applies to Delaware employees regardless of where the employment agreement was signed.
Can a Delaware employer enforce a non-compete for a $100,000+ employee?
Yes, subject to reasonableness requirements. For employees earning $100,000 or more annually, non-competes are enforceable in Delaware if they have a legitimate business justification, are reasonable in geographic scope, and do not exceed 2 years in duration. Courts will analyze the specific facts of the relationship.
Does Delaware's non-compete law apply if the employment contract is governed by another state's law?
Potentially yes. If the employee works in Delaware, Delaware courts may apply Delaware's policy against enforcing non-competes for lower-wage workers regardless of the contract's choice-of-law provision, particularly where Delaware has a materially greater interest in the matter.
How does Delaware treat non-competes in business sale transactions?
Non-competes accompanying the sale of a business are treated more favorably in Delaware. Courts apply a commercial reasonableness standard without the $100,000 salary threshold restriction. Sellers who receive value for goodwill can be held to broader restrictions, typically up to 5 years, if the scope is tied to the business sold.
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Non-Compete Agreement by State
Laws vary significantly by state. Find the right form for your location.
Disclaimer: LegalLawDocs.com provides self-help legal documents for informational purposes only. The documents and information on this site do not constitute legal advice and are not a substitute for consultation with a licensed attorney. Laws vary by state and change frequently — review your document with a qualified professional before relying on it.