Chancery Court says HKA’s post-exit restrictions were too broad for enforcement
Delaware’s Court of Chancery, on December 16, 2025, tossed key HKA claims, ruling its non-compete and “encouragement” non-solicit clause to be facially overbroad and unenforceable.
In HKA Global, LLC v. Christopher Beirise, Hansell Pasco, Tanner Courrier, and Accuracy US, LLC), HKA alleged that three former partners planned to resign and join Accuracy US, a competitor, and that they sought to recruit HKA employees to join them.
The story began with HKA’s July 2019 acquisition of Kenrich under a Stock Purchase Agreement. As part of that period, Christopher Beirise entered an employment agreement with The Kenrich Group, and a Confidentiality, Non-Competition and Non-Solicitation Agreement (the Restrictive Covenant Agreement, or RCA) was attached. The RCA is governed by Delaware law and imposed post-employment restrictions on Beirise, including a 12-month non-competition provision and a 12-month non-solicitation provision.
The court found the RCA’s non-compete unenforceable based on its breadth. The clause barred Beirise, for 12 months after termination, from directly or indirectly engaging in, competing with, or undertaking any planning to compete with “all or any portion of the business” carried out by any “Group Company” in the United States. The RCA defined “Group Company” to include the company and any of its direct or indirect parent or subsidiary entities. The court held that this structure was not tailored to the work Beirise performed and instead attempted to protect an entire corporate structure, including parents and subsidiaries for which the partners never worked. The court concluded there was no legitimate economic interest that could justify a one-year, nationwide restriction covering “any portion of the business” across that broader corporate web.
The RCA’s employee non-solicitation provision also failed. It prohibited Beirise from “recruit[ing], solicit[ing] or encourag[ing]” any “Group Company” employee to leave the employ of any “Group Company,” subject to a definition limiting it to employees employed within the prior 90 days and about whose employment Beirise had actual knowledge. The court held the provision suffered from the same overbreadth problem tied to the “Group Company” definition. Separately, it held that barring “encourag[ing]” employees to leave is facially overbroad because it captures non-competitive conduct; the opinion gave examples like advising someone to leave for health reasons, to retire, or to care for family, and noted it could reach discussions about leaving to join a non-profit.
HKA asked the court to revise the language (blue-pencil it) if it was found unenforceable. The court declined, explaining that Delaware courts generally refuse to blue-pencil facially overbroad restrictive covenants, especially where the defect is structural rather than clerical. The court reasoned that removing or rewriting terms like the “Group Company” concept or the word “encourage” would require drafting a new agreement and would risk creating a “no-lose” scenario for the employer that drafted the restrictions.
Those conclusions drove the outcomes on the challenged counts. The court granted partial judgment on the pleadings for defendants on claims dependent on the RCA’s restrictive covenants. Judgment was entered for Beirise on Count I because the RCA restrictive covenants were unenforceable. Judgment was entered for Accuracy, Courrier, and Pasco on Count III because tortious interference required an underlying breach of contract, and the court found no underlying breach of a valid contractual obligation given the RCA’s unenforceability.
The court also addressed part of HKA’s TSA-based claim. After the partners announced their planned resignation on June 14, 2024, the parties entered a Transition and Settlement Agreement (TSA) on August 6, 2024, governed by Delaware law, under which HKA agreed to partially release the partners from certain non-competition covenants to allow them to work for Accuracy, subject to fee-sharing arrangements. HKA argued that a TSA warranty (Section 8.1) was breached because, it said, the partners had already solicited HKA employees, which would have breached the RCA and a separate English-law Nominee Deed. The court held Count II failed to the extent it was premised on the RCA, because a void or unenforceable restrictive covenant imposes no legal duty and conduct cannot legally constitute a breach of a nullity. As to the Nominee Deed theory, the court held it could not adjudicate that predicate issue in Delaware because the Nominee Deed’s forum selection clause required disputes over its covenants to be resolved exclusively in England, and it dismissed that portion without prejudice to proceeding in the proper English forum.
For HR directors, the practical point reflected in the decision is about drafting and enforceability, not the underlying workplace conduct: the court treated corporate-umbrella non-competes and non-solicits, and especially language that bans “encourag[ing]” employees to leave, as facially overbroad and unenforceable under Delaware law. For the HR business industry, the opinion is a reminder that post-employment restrictions must be narrowly tied to legitimate business interests and to the employee’s actual role, and that Delaware courts may refuse requests to rewrite sweeping restrictions after the fact.
