51 Imperfect Solutions to Noncompete Law: Enforcing Noncompete Agreements After Employees Relocate

Since 2025, when the effort to federally regulate noncompete agreements suffered several court defeats, we have continued to see states adopt varying approaches to noncompete law. 

On one end of the spectrum is California and its long-standing approach of prohibiting employment-based noncompete agreements. California is not the only state to enact a noncompete ban, but California’s ban is uniquely far reaching. Under California Business and Professional Code § 16600.5, California’s ban applies no matter where the agreement was signed. Florida is on the other end of the spectrum. It recently enacted a first-of-its-kind noncompete law that strengthens an employer’s ability to enforce such agreements. As we explained here, effective July 1, 2025, Florida’s Contracts Honoring Opportunity, Investment, Confidentiality, and Economic Growth Act (CHOICE Act or the Act) creates a presumption of enforceability for agreements that comply with the Act’s notice requirements and income thresholds. The Act also requires courts to grant injunctive relief in the event of a breach.

With 51 varied solutions to noncompete law, employers across the country find themselves confronting a similar problem: What happens if an employee is hired in Florida, for instance, and signs an agreement drafted for Florida’s CHOICE Act, but years later the employee moves to California to work for a competitor, in violation of the noncompete agreement? Can the employer enforce its agreement under Florida law? Or will California Business and Professional Code § 16600.5 provide safe haven to the employee?

Key considerations include, among other things: (1) the choice-of-law provision in the agreement, (2) where the agreement was signed, (3) where the employee resided during employment, (4) where the employee relocated, (4) whether any of the states involved have enacted noncompete legislation, and (5) personal jurisdiction. The following cases provide guidance for how these considerations play out in practice.  

DraftKings Inc. v. Hermalyn, 118 F.4th 416 (1st Cir. 2024)

Michael Hermalyn worked for DraftKings, headquartered in Massachusetts. During his employment, Hermalyn signed a noncompete agreement containing a Massachusetts choice-of-law provision. Hermalyn subsequently moved to California to work for a competitor, Fanatics. Whether Hermalyn’s Fanatics employment violated his noncompete agreement with DraftKings depended on whether Massachusetts or California law applied. 

Hermalyn proactively filed a declaratory judgment action in California against DraftKings. Shortly thereafter, DraftKings initiated a lawsuit against Hermalyn in Massachusetts. The Massachusetts court applied Massachusetts law and issued a preliminary injunction enforcing the noncompetition provision and preventing Hermalyn from working for Fanatics.

Hermalyn appealed to the First Circuit Court of Appeals. The Court agreed to enforce the agreement’s choice-of-law provision and affirmed the injunction. The Court explained that choice-of-law provisions are generally enforced under Massachusetts law, unless a public-policy exception applies. Courts apply a public-policy exception and override choice-of-law provisions if applying Massachusetts law would violate a “fundamental policy” of the other state, if the foreign state has a “materially greater interest” in the dispute, and if the foreign state’s law would apply but for the choice-of-law clause. Oxford Global Resources v. Hernandez, 106 N.E.3d 556(Mass. 2018).

Hermalyn relied on Oxford to advocate for the application of California law. Oxford was a noncompete case in which a Massachusetts court applied California law despite a Massachusetts choice-of-law provision. But the DraftKings Court distinguished Oxford, explaining that the employee in Oxford worked for the former employer in California, breached the agreement in California, then went to work for a competitor in California, all of which mitigate Massachusetts’ interest in the dispute. Moreover, Oxford pre-dated Massachusetts’ statutory law restricting noncompete agreements. After the Oxford dispute arose,Massachusetts enacted a law that significantly restricts noncompete agreements. The First Circuit specifically noted that the Massachusetts legislature chose this law over competing bills that would have replicated California’s noncompete ban. Put simply, the Oxford Court weighed one state law that had no noncompete legislation (Massachusetts) against another state law that had banned noncompetes (California), while the DraftKings Court decided between two states that had both considered and enacted noncompete legislation codifying the respective state’s policy preference with respect to such agreements. 

Given the competing interests between two states with existing noncompete legislation, the Court found that California did not have a materially greater interest in the dispute than Massachusetts. Under Oxford, California law did not apply.

Marsh & McLennan Agency LLC v. Alliant Ins. Servs. Inc. et al., No. 25-CV-6936 (S.D.N.Y. Dec. 1, 2025)

The Southern District of New York recently confronted the same issue. Four Oregon-based employees of Marsh & McLennan Agency LLC (Marsh) resigned to take jobs with competitor Alliant Insurance Services, Inc. One of the employees immediately filed a declaratory judgment action in Oregon state court seeking to have his restrictive covenants declared unenforceable. Marsh removed the case to federal court and simultaneously initiated its own lawsuit against Alliant and all four individual employees in the Southern District of New York, seeking a temporary restraining order (TRO), alleging violations of the employees’ non-solicitation agreements, all of which contained New York forum selection clauses and choice-of-law clauses.

In Oregon, Marsh filed a motion to dismiss and transfer venue to the Southern District of New York pursuant to the forum selection clauses in the relevant agreements. Meanwhile, in New York, Alliant and the four individual defendants asked the court to abstain from deciding Marsh’s application for a TRO pursuant to the first-to-file rule. On September 18, 2025, the Southern District agreed to stay the case pending resolution by the District of Oregon pursuant to the first-to-file rule. It explained the following reasons for its holding: (1) the Southern District of New York follows the first-filed rule which requires the first-filed court to conduct the first-filed analysis; (2) the first-filed rule is “especially prudent” where there is a risk of inconsistent judicial decisions and a duplication of judicial resources, (3) there is no TRO exception to the first-filed rule; and (4) although an enforceable forum-selection clause might be grounds to offset the first-filed rule, it is still the first-filed court that must conduct the analysis. 

A few weeks later, on October 6, 2025, the District of Oregon agreed to transfer venue to the Southern District of New York. See Oldenburg v. Marsh & McLennan Agency LLC, No. 3:25-cv-01459, 2025 WL 2829802 (D. Or. Oct. 6, 2025). The Court explained that the validity of forum-selection clauses is governed by federal law, and the party opposing the forum-selection clause must establish that transfer to the chosen forum is unwarranted. The plaintiff argued that the forum-selection clause was procedurally and substantively unconscionable under both Oregon and federal law because they contravened Oregon public policy. The Court rejected both arguments. The procedural unconscionability argument failed because the plaintiff was a sophisticated insurance broker and the forum-selection language was written in plain English. And the substantive unconscionability argument failed because nothing in Oregon’s noncompete statutes “indicates a state policy in favor of Oregon as the appropriate forum for disputes over employment contracts.” Thus, the Court found in favor of litigating in New York, explaining: “Oregon’s interest in litigating Plaintiff’s case and any possible conflicts of law issues are not so significant as to outweigh the presumption in favor of enforcing the parties’ bargain to litigate this case in New York.” It bears noting that although Oregon’s noncompete statutes do not indicate that Oregon is the appropriate forum for disputes over restrictive covenants, other states have enacted legislation that explicitly states that restrictive covenant disputes involving in-state employees must be litigated within the state (e.g., Colorado). 

With the venue issue fully litigated, on December 1, 2025, the Southern District of New York issued an order analyzing the other issues at play in the dispute. The Court first analyzed whether it could exercise personal jurisdiction over Alliant, a California corporation with its principal place of business in California. The Court decided in the affirmative. It explained that specific personal jurisdiction existed because Marsh presented evidence that one of the Marsh clients who moved from Marsh to Alliant was based in New York. The Court held that Alliant’s intentional acceptance of the client and servicing of the client constituted forum-directed conduct sufficient for specific personal jurisdiction. 

Next, the Court analyzed whether New York or Oregon law governed the non-solicitation agreement. Marsh argued for New York law and pointed to the choice-of-law clause in the agreement. Alliant and the individual defendants asked the Court to override the choice-of-law provision and apply Oregon law. Like DraftKings,the disposition of the case likely turned on the choice of law question because Oregon law likely would have rendered the non-solicitation agreements void and unenforceable.

The Court held that New York law governed. Applying New York law, the non-solicitation agreements were enforceable. The Court therefore issued a preliminary injunction barring Alliant and the individual defendants from soliciting and accepting additional clients from Marsh.

Conspicuously absent from this Court’s opinion was any discussion of what would have happened if the Court applied Oregon law. The Court did not mention that the disposition of the case would have been the opposite if Oregon law were applied. Also conspicuously absent from the case was any discussion of California law. Unlike Oregon noncompete law, California’s noncompete law specifically instructs courts to enforce California’s noncompete ban no matter where an agreement is signed, where an employee workers, or when an agreement was signed. Had Alliant initiated this action in California and convinced a court to apply California law, the agreements would have been dead-on-arrival.

Disputes over forum and personal jurisdiction like this are likely to become increasingly common in noncompete litigation. Given how varied states are in their approaches to noncompete law, given that these cases are often a race to see who files first, and given that state lawmakers (like California) are attempting to give the widest possible reach to their noncompete laws, employers need to proactively consider forum and personal jurisdiction. It is a critical consideration when evaluating how to best enforce a noncompete agreement and how to strategically avoid unfavorable law.   

Delaware

Parties often default to Delaware when drafting choice-of-law clauses. In recent years, Delaware courts have trended against enforcing Delaware choice-of-law provisions in noncompete agreements. Two examples are listed below. In light of this trend, employers should think critically before selecting Delaware law for their restrictive covenant agreements.

• In Centurion Service Group, LLC v. Wilensky, No. 2023-0422-MTZ (Del. Ch. Aug. 31, 2023), the court refused to apply Delaware law despite a Delaware choice of law provision and summarily refused to reform and enforce an overly broad agreement with a stockholder/former manager of an acquired company.

• In Hightower Holding LLC v. Gibson, No. 2022-0086-LWW (Del. Ch. Feb. 9, 2023), the Chancery Court refused to enforce a noncompete against a partner in a business who lived and worked in Alabama. The court held that Alabama law and public policy had a greater connection to the dispute than Delaware law, even though the noncompete selected Delaware for the venue and governing law of any dispute. Under Alabama law, the noncompete was fatally overbroad and invalidated the covenant.

Plan Ahead with Choice-of-Law Provisions

Whether in Delaware, New York, California, or anywhere else, the consideration are the same for all employers: With every state taking a unique approach to noncompete law — and a workforce that is increasingly remote and more transient — it is critical that employers pay close attention to the choice-of-law provisions in their restrictive covenants, consider whether the provisions are enforceable, and plan ahead in case a choice-of-law provision is not enforced.