Key Points

  • The Delaware Supreme Court affirmed the Court of Chancery's dismissal of GI DI Rushmore Parent LP's restrictive-covenant suit against former Bluepeak executive Donald E. Stoops Jr. for lack of personal jurisdiction, and its denial of a preliminary injunction.
  • The court held that disputes over forum-selection clauses are intra-corporate claims, not internal-affairs claims, so the internal-affairs doctrine does not require Delaware law to govern them.
  • Under the Restatement (Second) of Conflict of Laws, Oklahoma was the default state because Stoops signed the agreement and performed his work there, and a fundamental policy may be found in case law as well as statutes.
  • Oklahoma case law refuses to enforce forum-selection clauses that were not negotiated or discussed, and it was undisputed that Stoops never received the partnership agreement containing the Delaware clause before signing.
  • The court declined to rest on the Oklahoma access statute relied on by the Court of Chancery and did not decide whether Delaware law would enforce the clause.

The Delaware Supreme Court ruled on Oct. 26 that a Delaware partnership cannot sue a former executive of its fiber-internet subsidiary in Delaware to enforce a noncompete, because the law of Oklahoma, where he lived and worked, voids the Delaware forum clause he never negotiated.

A panel of Chief Justice Seitz and Justices Traynor and Zurn affirmed the Court of Chancery's dismissal of GI DI Rushmore Parent LP's suit against Donald E. Stoops Jr. for lack of personal jurisdiction. The order, signed by Justice Gary F. Traynor for the court, also upheld the denial of a preliminary injunction.

The decision ends Rushmore's Delaware case without any ruling on whether Stoops broke his restrictive covenants when he joined a competitor. It holds that a fight over a forum-selection clause is not an internal-affairs matter that Delaware law automatically controls. It also holds that a state's "fundamental" policy, which can override a contract's choice of another state's law, may come from court decisions as well as statutes.

Rushmore is a Delaware limited partnership whose only subsidiary, Clarity Telecom LLC, does business as Bluepeak and sells fiber-to-the-home service in six states. Stoops was Bluepeak's vice president of market development from June 2021 to April 2026 and lived and worked in Oklahoma throughout. He resigned after accepting a job at Dobson Fiber, a Bluepeak competitor.

As part of his pay, Stoops received incentive units representing about 2% of Rushmore's management incentive pool. The grant agreement made him a limited partner and contained noncompetition, non-solicitation, confidentiality and non-disparagement covenants. The first three run for two years after his employment ends, and the non-disparagement covenant "purports to bind Stoops in perpetuity," the order said.

The grant agreement incorporated Rushmore's limited partnership agreement by reference, and only the partnership agreement contained the Delaware forum clause. Stoops "agree[d] and acknowledge[d] that (i) [he] ha[d] received and read a copy of the . . . Partnership Agreement." According to the order, he had neither received nor read it when he signed, and he first asked to see it in February 2024, more than two and a half years later.

Rushmore sued in the Court of Chancery shortly after Stoops left, seeking injunctions and damages, and relied on the forum clause as its only basis for jurisdiction. In a June 10, 2026, opinion, the Court of Chancery held that Oklahoma law governed and that an Oklahoma statute made the clause unenforceable. It added that even under Delaware law, enforcing the clause would be unreasonable because Stoops lacked notice of it.

On appeal, Rushmore argued that Delaware, not Oklahoma, was the "default state" for the choice-of-law analysis, that the two states' laws did not conflict, and that the clause was a matter of internal affairs that Delaware law must govern. The Supreme Court rejected those arguments and said it "need not determine whether Delaware would enforce the clause."

The internal-affairs doctrine, the order explained, "recognizes that only one State should have the authority to regulate a[n] [entity's] internal affairs." Relying on its 2020 decision in Salzberg v. Sciabacucchi, the court wrote that "disputes over forum-selection clauses are themselves intra-corporate claims, not internal-affairs claims," so an ordinary choice-of-law analysis applied.

That analysis follows the Restatement (Second) of Conflict of Laws, which honors a contract's chosen law unless, among other exceptions, applying it would be contrary to a fundamental policy of a state that has a materially greater interest and whose law would otherwise apply. The court found that state was Oklahoma, where Stoops signed the agreement and did the work that earned his units. Rushmore's contention that the place of performance was Delaware, or at least neutral, because the units reside in both states depending on whether they have vested, "confuses the place of performance with the location of the subject matter," the court wrote.

The court also held that a fundamental policy need not appear in a statute. "It follows, in our view, that a policy may also be fundamental if it is embodied in case law making one or more kinds of contracts illegal or protecting a person against the oppressive use of superior bargaining power," the order said.

Oklahoma's test comes from Eads v. Woodmen of the World Life Insurance Society, a 1989 decision of the Oklahoma Court of Civil Appeals that the order called the highest court in Oklahoma to consider the issue. Eads listed factors including the absence of bargaining over the clause and unequal bargaining power. Oklahoma courts are not uniform in applying Eads, the court noted, but two later appellate decisions suggest that lack of negotiation by itself is enough. "Lack of negotiation of a forum-selection clause seems to be sufficient to render the clause void under Oklahoma law," the court wrote.

That rule conflicts with Delaware's, the court held. "Delaware courts will typically enforce unnegotiated, otherwise-valid forum-selection clauses, but Oklahoma courts will only enforce a forum-selection clause that the parties specifically negotiated or discussed," the order said. It was undisputed that the parties never negotiated or discussed this clause, the court added, because Stoops had not received the partnership agreement before he signed.

The Supreme Court reached the Court of Chancery's result by a different route. In a footnote, it did not adopt the lower court's reliance on the Oklahoma statute, which voids contract terms barring a party from enforcing rights "by the usual legal proceedings in the ordinary tribunals." The justices wrote that "requiring access to 'the ordinary tribunals' is not the same as having a fundamental policy against enforcing forum selection clauses."

"Without that clause, Delaware has no personal jurisdiction over Stoops," the court wrote, describing him as "an Oklahoma resident with no Delaware contacts." It did not reach Oklahoma's limits on noncompetes or the Court of Chancery's alternative holding under Delaware law, and it does not address whether Rushmore could pursue its covenant claims elsewhere.