Delaware Court Endorses Broad Enforcement for Forfeiture Pacts

The Delaware Supreme Court says its opinion finding that Cantor Fitzgerald LP properly denied $9 million in equity payments to six former partners under forfeiture-for-competition agreements may be applied beyond limited partnerships.

Wednesday’s 16-page decision may clarify an area of law where state courts have split on similar questions in the absence of federal guidelines. The US Federal Trade Commission has proposed banning non-compete clauses in employment contracts.

“We agree with the Seventh Circuit’s ‘broad’ view of our Cantor Fitzgerald decision,” Chief Justice Collins J. Seitz Jr. said, writing for the court’s full five-member panel.

“We see no reason to ...