On June 10, 2026, Vice Chancellor Laster of the Delaware Court of Chancery denied a preliminary injunction sought by GI DI Rushmore Parent L.P. ("Holdco"), a holding company controlled by private equity firm GI Partners, against a former mid-level employee of its portfolio company, Bluepeak. The decision sends a strong signal to private equity sponsors and portfolio companies that Delaware courts will not rubber-stamp efforts to drag employees from other states into Delaware to enforce restrictive covenants embedded in equity award agreements—especially when the employee never received or saw the key contractual documents being used against them. 

Background

According to the Court’s opinion, Holdco recruited Donald Stoops, a telecom industry veteran based in Oklahoma, to serve as Vice President for New Market Activity at Bluepeak. Stoops took a significant pay cut—from over $400,000 to $200,000—in exchange for the promise of equity upside. Six weeks after he started working, Bluepeak presented Stoops with a take-it-or-leave-it Incentive Unit Grant Agreement (the "Unit Agreement") containing restrictive covenants—including non-compete, non-solicitation, confidentiality, and non-disparagement provisions lasting two years post-employment. 

The Unit Agreement selected Delaware law but did not itself contain a Delaware forum selection clause. Instead, it incorporated by reference Holdco's 123-page Partnership Agreement, which did contain such a clause. Critically, Stoops never received the Partnership Agreement, was never told where to find it, asked for it multiple times, and was refused each time. Holdco treated the Partnership Agreement as confidential, and only a handful of C-suite executives had seen it. 

Stoops eventually resigned and joined an alleged competitor. Holdco sued in the Delaware Court of Chancery, relying on the Delaware forum selection clause that Stoops had never seen. 

The Court's Analysis

Vice Chancellor Laster denied the preliminary injunction on the threshold ground that Holdco failed to establish personal jurisdiction over Stoops. The court reached this conclusion on two independent bases.

Oklahoma Law Invalidates the Forum Selection Clause

The court held that Oklahoma law—not Delaware law—governs the employment-related features of the Unit Agreement, including the restrictive covenants and the forum selection clause used to enforce them. Applying the Restatement (Second) of Conflict of Laws, the court found that every relevant factor—place of contracting, negotiations, performance, subject matter, and the employee's domicile—pointed to Oklahoma. Oklahoma's Access Statute, which voids contractual provisions restricting access to Oklahoma courts, therefore rendered the Delaware Forum Clause invalid. 

The court rejected Holdco's argument that uniform application of Delaware law was necessary, emphasizing that the Unit Agreement's own blue-penciling and severability provisions anticipated non-uniform enforcement across jurisdictions. 

Even Under Delaware Law, Enforcement Would Be Unreasonable

Assuming Delaware law applied, the court independently concluded that enforcing the forum selection clause would be unreasonable under the Bremen / Carnival Cruise framework, finding that Stoops went "zero for three" on the key factors. First, Stoops had no notice of the Delaware Forum Clause because it appeared in a document he never received and could not access. Second, Delaware made little sense as a forum for an employment dispute centered in Oklahoma. Third, Stoops did not retain the option to reject the contract with impunity—by the time he saw the Unit Agreement, he had already resigned from his prior employer and started at Bluepeak. 

Key Takeaways

• Restrictive covenants in equity awards will be treated as employment provisions. The court looked past the corporate wrapper and treated the restrictive covenants as what they functionally are: employment-related restrictions. The internal affairs doctrine does not extend to a Delaware entity's relationships with its employees, meaning Delaware law will not automatically override the employment statutes of the state where the employee lives and works.
• "Secret" forum selection clauses are unenforceable. A forum selection clause buried in an incorporated document that the employee never received, was never shown, and could not obtain is unreasonable and will not be enforced. Companies must ensure that employees actually receive or can meaningfully access all documents containing material terms—including forum selection and choice-of-law provisions.
• Take-it-or-leave-it agreements face heightened scrutiny. The court drew a clear spectrum from horizontal transactions (business sales between sophisticated parties) to vertical ones (employer-to-employee), and signaled that adhesive equity award agreements presented to mid-level employees warrant skepticism regarding choice of law, choice of forum, and the scope of restrictive covenants.
• Employee bargaining power matters. The court contrasted Stoops—a VP who could negotiate the number of units but not their terms—with C-suite executives who had actual leverage. Notably, at least one C-suite executive successfully negotiated different forum, governing law, and covenant terms, which the court viewed as evidence that the standard-form terms were unfair.
• PE firms face growing headwinds in Delaware on non-compete enforcement. The court catalogued the rapid proliferation of restrictive covenant disputes in the Court of Chancery driven by private-equity-backed companies channeling employment disputes into Delaware. The court warned that this volume is unsustainable, and that Delaware has an institutional interest in not becoming the default forum for every post-employment dispute involving a Delaware entity.
• Oklahoma's employee-protective statutes carry real force. For companies with employees in Oklahoma, the court's analysis confirms that Oklahoma's broad prohibition on non-competes and its Access Statute will likely override Delaware choice-of-law and forum provisions.