Delaware courts continue to apply increasing scrutiny to restrictive covenants, and recent decisions make clear that nonsolicitation provisions are no exception, even in the context of the sale of a business. In a recent Court of Chancery decision involving a sale-of-business transaction—Boingo Wireless, Inc. v. Georges—the court dismissed nonsolicitation claims at the pleading stage, finding that language prohibiting “encouraging” or “disrupting” relationships restricted “noncompetitive” speech and therefore was overbroad. Though unclear, this appears to be the first time the Delaware Chancery Court has struck down and refused to blue-pencil an employee nonsolicit in a clear sale-of-business context.
The Boingo decision follows the Court of Chancery’s December 2025 decision in HKA Global, LLC v. Beirise,[1] which in turn relied on the Court of Chancery’s 2023 decision in Sunder I. Although the nonsolicits in Boingo and HKA were narrower than the one in Sunder—and even though Boingo’s arose from a sale of business—all three met the same fate. These cases signal that Delaware courts are scrutinizing nonsolicits, even in sale-of-business contexts where courts have historically afforded greater deference.
This February, in Boingo Wireless, Inc. v. Georges,[2] the Court of Chancery considered restrictive covenants entered into in connection with a sale of business. The case arose after a former director allegedly formed and led a competing enterprise following a $14 million transaction that included noncompete and employee and customer nonsolicit provisions. Boingo sought to enforce both sets of covenants.
The court allowed a noncompete tied to a substantial purchase price to proceed, but dismissed the nonsolicit claims.
The court concluded that the nonsolicit was facially overbroad because it prohibited “encouraging” or “inducing” employees and customers and “disrupting” third-party relationships.
The court declined to rewrite or narrow the provision and dismissed the nonsolicit claims at the pleading stage.
In HKA Global, LLC v. Beirise,[3] the dispute arose from an acquisition in which the defendant entered into a restrictive covenant agreement executed in connection with the transaction. The nonsolicit prohibited the executive, for 12 months following the termination of his employment, from “solicit[ing] or encourag[ing]” any employee of a defined “Group Company” to leave employment. The agreement defined “a Group Company employee” to mean “any person who was employed by any Group Company within the ninety (90) days preceding the date on which Executive’s employment terminated and about whose employment the Executive had actual knowledge.”
HKA argued that the nonsolicit should receive the more deferential review applicable to sale-of-business agreements. The court rejected that framing, describing it as “a stretch” to characterize the agreement as executed in the acquisition context where the defendant agreed to the restrictions in exchange for continued employment rather than as a selling equity holder. The court, however, held that even if the less searching sale-of-business standard applied, the nonsolicit would still fail.
The court found the clause overbroad in two respects. First, the restriction extended across the entire corporate family, including affiliates for which the executive had never worked, disconnecting the covenant from the goodwill actually at issue. Second, the prohibition on “encouraging” employees to leave was facially overbroad because it captured noncompetitive conduct, such as advising a colleague to retire or pursue a different career path for personal reasons. Citing Sunder only, the court held that “[t]his bar on ‘encouragement,’ . . . is facially overbroad and unenforceable as a matter of law.”
The court declined to blue-pencil the provision, explaining that narrowing the definition of protected entities or removing the “encourage” language would require rewriting the agreement. The opinion emphasized that HKA, as a sophisticated party, must “live with the consequences” of drafting overbroad restrictions.
The decision in HKA Global was based on Sunder Energy, LLC v. Jackson.[4]
In Sunder,[5] the nonsolicit was embedded in an LLC agreement governing incentive holders rather than in a sale-of-business transaction. It barred Jackson and his affiliates from “solicit[ing], recruit[ing], hir[ing], induc[ing] or encourag[ing] to leave” any employee or independent contractor, including anyone employed or hired by the company “for any period of time.”[6] The agreement defined this to include “initiating communications with an employee or independent contractor of the Company relating to actual or possible employment or an independent contractor relationship for an entity other than the Company.” It applied during the period when the holder owned the incentive units and for two years afterward.
Applying Delaware’s reasonableness framework for restrictive covenants, the Court of Chancery examined whether the provision was reasonable in scope, advanced a legitimate economic interest, and survived equitable balancing. The court found that the restriction was overbroad for several reasons. It applied to former employees and independent contractors regardless of whether the defendant had worked with them or for how long ago they worked for Sunder, extended to a category of “affiliates,” and prohibited not only solicitation but also “induc[ing]” or “encourag[ing]” employees to leave or initiating communications relating to other actual or possible employment:
Jackson would violate the Personnel Restriction if he contacted someone who went door to door for Sunder on one job in August 2019, shortly after Co-Founders started the business. The Personnel Restriction also applies regardless of why the employee or independent contractor leaves. The person might retire, and yet Jackson would have breached the Personnel Restriction if he lacked the foresight to refuse to offer rudimentary thoughts about whether the person had saved enough money. Or the person might leave the sales industry entirely and join a non-profit, and yet Jackson would have breached the Personnel Restriction if he lacked the self-discipline to refuse to discuss whether joining a non-profit would be more personally rewarding and aligned with that person’s values.
The court declined to blue-pencil it. The court did not cite any authority in finding the nonsolicit to be overbroad and declining to reform it. The court observed that the nonsolicit would have been reasonable had it “(i) only restricted Jackson, (ii) only lasted for a reasonable time, (iii) only applied to current Sunder personnel, and (iv) only restricted recruiting existing personnel for another business.”
On appeal, the Delaware Supreme Court affirmed[7] the Court of Chancery’s discretion to decline to blue‑pencil overbroad restrictive covenants.[8]
In light of these developments, there are a few practical takeaways to keep in mind:
[1] HKA Glob., LLC v. Beirise, No. 2024-0910-LWW, 2025 WL 3639811 (Del. Ch. Dec. 16, 2025).
[2] Boingo Wireless, Inc. v. Georges, C.A. No. 2025-1371-LWW (Del. Ch. Feb. 19, 2026) (Will, V.C.). As of the time of publication, the court’s written decision is not available.
[3] HKA Glob., LLC v. Beirise, No. 2024-0910-LWW, 2025 WL 3639811 (Del. Ch. Dec. 16, 2025).
[4] Sunder Energy, LLC v. Jackson, 305 A.3d 723 (Del. Ch. 2023), aff’d in part, rev’d in part on other grounds, 332 A.3d 472 (Del. 2024).
[5] Kodiak Two Years Later: Is Delaware’s Blue Pencil Turning Red for Non-Competes?.
[6] “During the applicable Restricted Period, each Restricted Person shall not, and shall not cause or permit such Restricted Person’s Affiliates to, directly or indirectly, solicit, recruit, hire, induce or encourage to leave the employ of, or cease providing services to, the Company, any Person who is at that time an employee or independent contractor of the Company, or who has been employed of hired by the Company for any period of time, and such Restricted Person shall not, and shall not cause or permit such Restricted Person’s Affiliates to, cooperate with others in doing or attempting to do so. The terms ‘solicit, recruit, hire, induce or encourage’ include, directly or indirectly: (i) initiating communications with an employee or independent contractor of the Company relating to actual or possible employment or an independent contractor relationship for an entity other than the Company; (ii) offering bonuses or additional compensation to encourage or cause any employee or independent contractor of the Company to terminate employment with the Company; or (iii) supplying the names of, or otherwise referring or recommending, any employee or independent contractor of the Company to personnel recruiters or persons engaged in hiring for an entity other than the Company.” Sunder Energy, LLC v. Jackson, 305 A.3d 723, 758–59 (Del. Ch. 2023), aff’d in part, rev’d in part, 332 A.3d 472 (Del. 2024).
[7] Non-Compete Round Up- FTC, NLRB, California and Delaware.
[8] Sunder Energy, LLC v. Jackson, 332 A.3d 472 (Del. 2024).