The Delaware Supreme Court ruled that financial services company Cantor Fitzgerald properly denied $9 million to former partners under noncompete agreements, Bloomberg Law reported Jan. 29.
The suit, filed in 2014, involves former partners with Cantor who accused the company of using noncompetes to deny promised payments after they left the firm for competitors. The plaintiffs argued that they were not competing with the firm by leaving to join Reorient Group, a Chinese bank.
The decision, which upended a lower court's ruling, said the company's noncompete provisions were not too broad and applied to a range of "competitive activity," according to the report. The court also ruled that when a partner moves to a competing firm, Cantor was not required to grant a deferred benefit to the partner because they agreed to forfeit it.
The ruling likely will affect other lawsuits, according to the report, particularly those related to employment law, as Delaware is the corporate home to nearly 70% of Fortune 500 companies.
The lower court said the partnership unfairly limited career prospects for departing partners. The Supreme Court found the agreement does not restrict competition.
Attorneys for the former partners did not immediately respond to Bloomberg's request for comment.