[{"data":1,"prerenderedAt":-1},["ShallowReactive",2],{"detail-sidebar-cat-1-en-105":3,"doc-seo-282422-105":53,"doc-detail-282422-en":127},{"code":4,"msg":5,"data":6},0,"success",[7,14,19,24,29,34,39,44,49],{"id":8,"doc_module":9,"doc_module_name":10,"category_name":11,"show_sort_weight":12,"slug":13},11,1,"Template","Presentations",90,"presentations",{"id":15,"doc_module":9,"doc_module_name":10,"category_name":16,"show_sort_weight":17,"slug":18},12,"Resumes",80,"resumes",{"id":20,"doc_module":9,"doc_module_name":10,"category_name":21,"show_sort_weight":22,"slug":23},14,"Invoices",70,"invoices",{"id":25,"doc_module":9,"doc_module_name":10,"category_name":26,"show_sort_weight":27,"slug":28},15,"Posters",60,"posters",{"id":30,"doc_module":9,"doc_module_name":10,"category_name":31,"show_sort_weight":32,"slug":33},16,"Social Media",50,"social-media",{"id":35,"doc_module":9,"doc_module_name":10,"category_name":36,"show_sort_weight":37,"slug":38},17,"Forms",40,"forms",{"id":40,"doc_module":9,"doc_module_name":10,"category_name":41,"show_sort_weight":42,"slug":43},18,"Letters",30,"letters",{"id":45,"doc_module":9,"doc_module_name":10,"category_name":46,"show_sort_weight":47,"slug":48},21,"Paper Templates",5,"papers-templates",{"id":50,"doc_module":9,"doc_module_name":10,"category_name":51,"show_sort_weight":4,"slug":52},158,"General","general-158",{"code":4,"msg":54,"data":55},"ok",{"site_id":56,"language":57,"slug":58,"title":59,"keywords":60,"description":61,"schema_data":62,"social_meta":120,"head_meta":122,"extra_data":124,"updated_unix":126},105,"en","employer-update-march-2021-less-is-more","Employer Update - March 2021 - Less is More","","March 2021 issue of Employer Update examines how embedding restrictive covenants across multiple agreements can increase litigation complexity for employers. It analyzes the risks illustrated by Delaware Chancery Court decisions, where simultaneous enforcement battles across jurisdictions may arise and leave limited relief options. The article discusses “belts and suspenders” strategies, the impact of state noncompetition legislation, and considerations around whether restrictive covenants belong in governing corporate documents to benefit from Delaware internal affairs deference.",{"@graph":63,"@context":119},[64,80,102],{"@type":65,"itemListElement":66},"BreadcrumbList",[67,71,74,77],{"item":68,"name":69,"@type":70,"position":9},"https://docshare.wps.com","Home","ListItem",{"item":72,"name":10,"@type":70,"position":73},"https://docshare.wps.com/template/",2,{"item":75,"name":41,"@type":70,"position":76},"https://docshare.wps.com/template/letters/",3,{"item":78,"name":59,"@type":70,"position":79},"https://docshare.wps.com/template/employer-update-march-2021-less-is-more/282422/",4,{"url":78,"name":59,"@type":81,"image":82,"author":87,"headline":59,"publisher":90,"fileFormat":93,"inLanguage":57,"description":61,"dateModified":94,"datePublished":95,"encodingFormat":93,"isAccessibleForFree":96,"interactionStatistic":97},"DigitalDocument",{"url":83,"@type":84,"width":85,"height":86},"https://docshare.wps.com/thumbnails/employer-update-march-2021-less-is-more/282422.png","ImageObject",442,249,{"name":88,"@type":89},"Melati","Person",{"url":68,"name":91,"@type":92},"DocShare","Organization","application/pdf","2026-10-19","2026-09-16",true,{"@type":98,"interactionType":99,"userInteractionCount":101},"InteractionCounter",{"@type":100},"ViewAction",7,{"@type":103,"mainEntity":104},"FAQPage",[105,111,115],{"name":106,"@type":107,"acceptedAnswer":108},"Why do employers use the \"belts and suspenders\" approach with restrictive covenants in multiple agreements?","Question",{"text":109,"@type":110},"Employers require substantially similar restrictive covenants across employment and related agreements so that if one is unenforceable, covenants in other agreements may still be enforced. They may also add benefits forfeiture tied to covenant breaches as an additional enforcement rationale.","Answer",{"name":112,"@type":107,"acceptedAnswer":113},"What perils can arise from embedding restrictive covenants in multiple agreements?",{"text":114,"@type":110},"Employers may face extended enforcement battles in multiple jurisdictions at the same time, potentially ending with no clear path to relief. The issue is heightened by more states limiting enforcement of noncompetition provisions against former employees.",{"name":116,"@type":107,"acceptedAnswer":117},"How did the Delaware Chancery Court treat claims under the LLC agreements versus the employment agreement in AG Res. Holdings, LLC v. Terral?",{"text":118,"@type":110},"The court applied Delaware law to claims under the LLC agreements, viewing them as constitutive documents of a Delaware entity. It treated the employment agreement differently, given the Louisiana court’s earlier rulings and the employment-based conduct underlying the claims.","https://schema.org",{"og:url":78,"og:type":121,"og:title":59,"og:site_name":91,"og:description":61},"article",{"robots":123,"canonical":78},"index,follow",{"doc_id":125,"site_id":56},282422,1790175207,{"code":4,"msg":5,"data":128},{"doc_id":125,"user_id":129,"nickname":88,"user_avatar":130,"doc_module":9,"category_id":40,"category_name":41,"doc_title":59,"doc_description":61,"doc_content":131,"file_id":132,"file_url":133,"file_type":134,"file_size":135,"view_count":101,"is_deleted":4,"is_public":9,"is_downloadable":9,"audit_status":9,"page_count":136,"language":137,"language_code":57,"site_id":56,"html_lang":57,"table_of_contents":138,"faqs":139,"seo_title":140,"seo_description":61,"update_tm":141,"read_time":76},962085570644,"https://ap-avatar.wpscdn.com/davatar_994ba38a5ba835b3df7d355c54d3ed8d","March 2021  \nLess is More:  \nWhen Embedding Restrictive Covenants in Multiple Agreements Can Lead to Choppy Waters for Employers  \nBy Gary D. Friedman, Ami G. Zweig, and Thomas McCarthy  \nIn This Issue  \n1 Less is More: When Embedding Restrictive Covenants in Multiple Agreements Can Lead to Choppy Waters for Employers  \n5 Aftermath of Ixchel Pharma, LLC v. Biogen, Inc. and the“Rule of Reason” Analysis  \nWhen seeking to protect against unfair competition from former employees through the use of restrictive covenants, companies often take a “belts and suspenders” approach. For example, an employer may require an employee to agree to the same (or substantially similar) covenants in an employment agreement, a stock plan, an incentive award agreement, and any other agreements executed by the employee. The theory behind this approach is straightforward: if one agreement is found to be unenforceable for whatever reason, employers can seek to enforce the covenants in other agreements. Furthermore, if the applicable agreement requires forfeiture of specified benefits (such as severance pay or equity awards) in the event of a restrictive covenant breach, that may provide another reason for including the same restrictive covenant in multiple agreements.  \nHowever, a recent Delaware Chancery Court decision illustrates certain perils that may arise from this kind of fortress approach. Rather than creating layers of protection, employers may face simultaneous, extended enforcement battles in multiple jurisdictions, and be left at the end without a clear path to relief. This complication is compounded by the increasing number of states that have adopted legislation limiting an employer’s ability to enforce noncompetition provisions against former employees, as employees are now more likely than in the past to find hospitable jurisdictions in which to challenge these restrictive covenants. Employers may therefore consider whether they might be better served having just one set of restrictive covenants, to avoid the possibility of getting caught in the maelstrom of simultaneous litigations. The Chancery Court opinion also raises the question of whether these covenants are best included in the company’s governing documents, where possible, asthe Chancery Court may be more likely to enforce choice-of-law and venueselection provisions in these types of corporate formation documents under the Court’s deference to the “internal affairs” of Delaware companies.  \nAG Res. Holdings, LLC v. Terral  \nThomas Terral was the co-founder of an agricultural lending business based in Louisiana. In 2015, the business was acquired by a private equity firm andrestructured as a holding company (AG Recourse Holdings, LLC) and an operating entity (AG Resource Management, LLC), both of which were formed in Delaware. Terral remained as a manager of the LLCs, and also served as Chief Executive Officer and Executive Chairman of the company, working out of its headquarters in Louisiana.  \nThe LLC agreements for the Delaware entities contained a “good faith” clause that required the company’s managers to “act in good faith and within the scope of [the manager’s] authority. The LLC agreements also contained non-competition covenants preventing members from competing with the company, as well as Delaware choice of law and forum selection provisions. Terral was also subject to an employment agreement, which contained the same non-compete covenant as the LLC agreements, as well as non-solicitation, non-disparagement, noninterference, and confidentiality obligations. The employment agreement also contained a Delaware choice of law provision, but no choice of forum clause. On September 9, 2020, the company terminated Terral for allegedly secretly planning to compete or otherwise “steal [the company’s] business.” Terral promptly filed a declaratory judgment action against the company in Louisiana state court, seeking declarations that (i) the non-competition covenant in his emplo","cbCaitsdsqomTlzg","https://ap.wps.com/l/cbCaitsdsqomTlzg","pdf",370051,8,"English","# In This Issue\n## Less is More: When Embedding Restrictive Covenants in Multiple Agreements Can Lead to Choppy Waters for Employers\n## Aftermath of Ixchel Pharma, LLC v. Biogen, Inc. and the \"Rule of Reason\" Analysis","[{\"question\":\"Why do employers use the \\\"belts and suspenders\\\" approach with restrictive covenants in multiple agreements?\",\"answer\":\"Employers require substantially similar restrictive covenants across employment and related agreements so that if one is unenforceable, covenants in other agreements may still be enforced. They may also add benefits forfeiture tied to covenant breaches as an additional enforcement rationale.\"},{\"question\":\"What perils can arise from embedding restrictive covenants in multiple agreements?\",\"answer\":\"Employers may face extended enforcement battles in multiple jurisdictions at the same time, potentially ending with no clear path to relief. The issue is heightened by more states limiting enforcement of noncompetition provisions against former employees.\"},{\"question\":\"How did the Delaware Chancery Court treat claims under the LLC agreements versus the employment agreement in AG Res. Holdings, LLC v. Terral?\",\"answer\":\"The court applied Delaware law to claims under the LLC agreements, viewing them as constitutive documents of a Delaware entity. It treated the employment agreement differently, given the Louisiana court’s earlier rulings and the employment-based conduct underlying the claims.\"}]","Employer Update - March 2021 - Less is More | PDF",1789574106]