Court Opinion

ID: 9951345
Source: CourtListenerOpinion
Date Created: 2024-03-15 20:00:52.5861+00
Date Added: 2024-06-11T14:39:34.239221
License: Public Domain

In the

    United States Court of Appeals
                For the Seventh Circuit
                    ____________________
No. 23-2330
LKQ CORPORATION,
                          Plaintiff/Counter-Defendant-Appellant,
                                v.

ROBERT RUTLEDGE,
                           Defendant/Counter-Claimant-Appellee.
                    ____________________

        Appeal from the United States District Court for the
          Northern District of Illinois, Eastern Division.
         No. 1:21-cv-03022 — Thomas M. Durkin, Judge.
                    ____________________

   ARGUED FEBRUARY 14, 2024 — DECIDED MARCH 15, 2024
                ____________________

   Before SCUDDER, ST. EVE, and LEE, Circuit Judges.
    SCUDDER, Circuit Judge. This case presents a complicated
and important issue of Delaware law: whether, and in what
circumstances, contractual provisions requiring a corpora-
tion’s former employees to forfeit a monetary benefit upon
leaving the firm and joining a competitor—so-called forfei-
ture-for-competition provisions—are subject to review for
reasonableness. Robert Rutledge agreed to such a provision
as part of his participation in LKQ Corporation’s restricted
2                                                 No. 23-2330

stock program. When he resigned from the company and
went to work for a competitor, LKQ sought to recover from
Rutledge the proceeds he realized from multiple stock sales
over many years.
    Earlier this year the Delaware Supreme Court held in Can-
tor Fitzgerald, L.P. v. Ainslie, No. 162, 2023, 2024 WL 315193
(Del. Jan. 29, 2024) that forfeiture-for-competition provisions
in limited partnership agreements are not subject to a reason-
ableness review. What we cannot discern with confidence is
whether the holding in Cantor Fitzgerald applies outside the
context of highly sophisticated parties, including where the
mandated forfeiture is expansive in scope. Because of the im-
portance of stability and predictability in Delaware corporate
law and the common use of restrictive stock unit agreements
governed by Delaware law, we certify the questions set forth
in this opinion to the Delaware Supreme Court. We otherwise
affirm the district court’s entry of judgment in Rutledge’s
favor.
                               I
                              A
    For more than a decade, Robert Rutledge worked as a
Plant Manager at LKQ Corporation, a national supplier of sal-
vage and recycled automobile parts. Rutledge oversaw the
company’s Lake City, Florida facility. LKQ designated
Rutledge as a “key person” eligible to receive restricted stock
unit awards—a designation reserved for less than two percent
of its workforce. Key persons can decline stock awards with-
out consequence. LKQ conditions them solely on the recipient
employee executing and abiding by a Restricted Stock Unit
(RSU) Agreement. Employees must also separately execute
No. 23-2330                                                    3

Confidentiality, Non-Competition, and Non-Solicitation
Agreements, which the parties collectively call Restrictive
Covenant Agreements.
    Each year between 2013 and 2020, LKQ offered Rutledge
a restricted stock unit award. In connection with accepting
those awards, he executed RSU Agreements with LKQ. From
2011 to 2020, Rutledge also entered into separate Restrictive
Covenant Agreements. In return, Rutledge received an an-
nual allotment of LKQ stock distributed on a vesting sched-
ule. He later sold all of his vested stock—the value of which
the parties dispute but is in the hundreds of thousands of dol-
lars—on the open market.
    Among other terms, the RSU and Restrictive Covenant
Agreements prohibited Rutledge from working for a compet-
itor within nine months of leaving LKQ. Breach risked injunc-
tive relief, or in the case of the RSU Agreements, forfeiting all
proceeds from the stock awards. In April 2021, five days after
resigning from LKQ, Rutledge went to work for Fenix Parts,
LKQ’s direct competitor.
                               B
    Invoking diversity jurisdiction, LKQ sued Rutledge in fed-
eral court in Chicago, alleging breach of the RSU Agreements,
breach of the Restrictive Covenant Agreements, and unjust
enrichment. LKQ sought injunctive relief under the Restric-
tive Covenant Agreements and the claw back of all proceeds
realized from each of Rutledge’s sales of stock.
   The district court made short work of LKQ’s unjust enrich-
ment claim. It explained that a claim for unjust enrichment—
even pleaded in the alternative—is unavailable under Illinois
law where the claim’s challenged conduct is the subject of an
4                                                  No. 23-2330

express contract. Since LKQ pleaded that the RSU Agree-
ments governed the parties’ relationship, incorporating those
allegations in its unjust enrichment claim, it could not also
seek recovery from Rutledge on a theory of unjust enrich-
ment.
    Following discovery, the parties filed cross motions for
summary judgment, focusing on the enforceability of both the
RSU and Restrictive Covenant Agreements. The district court
devoted the bulk of its attention to the forfeiture-for-competi-
tion provision in each RSU Agreement. Relying on the Dela-
ware Chancery Court’s opinion in Ainslie v. Cantor Fitzgerald,
L.P., No. 9436, 2023 WL 106924 (Del. Ch. Jan. 4, 2023), the dis-
trict court concluded that Delaware law requires analyzing a
forfeiture-for-competition provision for reasonableness. From
there, the district court determined that the RSU Agreements
(under Delaware law) and Restrictive Covenant Agreements
(under Illinois law) imposed unreasonable restraints on trade,
rendering both unenforceable. In the end, then, the district
court entered judgment for Rutledge on LKQ’s claims.
   LKQ now appeals, challenging both the district court’s
dismissal of the unjust enrichment claim and entry of sum-
mary judgment for Rutledge.
                               II
    While the most substantial issue on appeal concerns the
forfeiture-for-competition provision within the RSU Agree-
ments, we can resolve the other issues without much diffi-
culty. We start with the district court’s dismissal of LKQ’s
claim for unjust enrichment. We review the dismissal against
a clean slate, construing all facts and reasonable inferences in
LKQ’s favor. See Gociman v. Loyola Univ. of Chi., 41 F.4th 873,
No. 23-2330                                                     5

881 (7th Cir. 2022). The parties agree that Illinois law governs
this claim. See McCoy v. Iberdrola Renewables, Inc., 760 F.3d 674,
684 (7th Cir. 2014).
    LKQ’s unjust enrichment claim fails because it roots itself
in the contention that Rutledge breached an express con-
tract—the RSU Agreements. As we have long recognized,
“[w]hen two parties’ relationship is governed by contract,
they may not bring a claim of unjust enrichment unless the
claim falls outside the contract.” Util. Audit, Inc. v. Horace
Mann Serv. Corp., 383 F.3d 683, 688–89 (7th Cir. 2004) (apply-
ing Illinois law). Indeed, where, as here, “the existence of a
contract between the parties is undisputed, an unjust enrich-
ment claim will seldom survive a motion to dismiss.” Goci-
man, 41 F.4th at 887; see also Karimi v. 410 N. Wabash Venture,
LLC, 952 N.E.2d 1278, 1284–85 (Ill. App. Ct. 2011) (“If the com-
plaint expressly alleges a contract, the count alleging unjust
enrichment is properly dismissed.”).
    LKQ does not suggest that its claim falls outside the RSU
Agreements. To the contrary, it maintains that it properly and
sufficiently pleaded unjust enrichment as an alternative the-
ory of recovery. But “a party may not incorporate by reference
allegations of the existence of a contract between the parties
in the unjust enrichment count.” Gociman, 41 F.4th at 887. LKQ
did just that: it incorporated its allegations about the forfei-
ture-for-competition provision, including Rutledge’s alleged
“conduct … in breach of the RSU Agreements” in its claim for
unjust enrichment. “[T]his pleading error prevents [any] un-
just enrichment claim from going forward.” Id.
6                                                  No. 23-2330

                              III
                               A
    We turn next to the claim that Rutledge breached the Re-
strictive Covenant Agreements by immediately going to work
for a competitor, Fenix, upon resigning from LKQ.
   Each Restrictive Covenant Agreement prohibited
Rutledge from “directly or indirectly” “be[ing] employed
by … any business that would be competitive with any busi-
ness conducted by [LKQ] … anywhere within a 75 mile ra-
dius of any [LKQ] facility … at which [Rutledge] worked” for
nine months following the termination of his employment.
For Rutledge, this restriction applied to a 75-mile radius of
LKQ’s Lake City, Florida facility.
    The parties agree that the agreements’ non-competition
provision is reviewed for reasonableness. Pursuant to the Re-
strictive Covenant Agreements’ choice-of-law provision, we
conduct that review under Illinois law. “[B]ecause Illinois
courts abhor restraints on trade, restrictive covenants are
carefully scrutinized.” Liautaud v. Liautaud, 221 F.3d 981, 986
(7th Cir. 2000) (quoting Prairie Eye Ctr., Ltd. v. Butler, 713
N.E.2d 610, 613 (Ill. App. Ct. 1999)). But “it is equally estab-
lished that a restrictive covenant will be upheld if it contains
a reasonable restraint and the agreement is supported by con-
sideration.” Reliable Fire Equip. Co. v. Arredondo, 965 N.E.2d
393, 396 (Ill. 2011).
    The Illinois Supreme Court has explained that a restrictive
covenant is reasonable “only if the covenant: (1) is no greater
than is required for the protection of a legitimate business in-
terest of the employer-promisee[,] (2) does not impose undue
hardship on the employee-promisor, and (3) is not injurious
No. 23-2330                                                    7

to the public.” Id. Baked into this totality-of-the-circumstances
review is “the propriety of the limitations in terms of their
length in time, their territorial scope, and the activities that
they restrict.” Cambridge Eng’g, Inc. v. Mercury Partners 90 BI,
Inc., 879 N.E.2d 512, 522 (Ill. App. Ct. 2007); see also Reliable
Fire, 965 N.E.2d at 396, 403.
                               B
    Like the district court, we see the non-competition provi-
sion as overbroad and unreasonable. Most troublesome is the
nine-month restriction barring Rutledge from working for
any competitor in any capacity. Illinois law disfavors “blanket
bar[s] on all activities for competitors.” Cambridge Eng’g, 879
N.E.2d at 526; see also AssuredPartners, Inc. v. Schmitt, 44
N.E.3d 463, 443 (Ill. App. Ct. 2015) (holding a restrictive cov-
enant prohibiting work “in any capacity” within professional
liability insurance overbroad and unenforceable); Bus. Recs.
Corp. v. Lueth, 981 F.2d 957, 962 (7th Cir. 1992) (recognizing
that Illinois courts “frown upon an across-the-board limita-
tion on [an employee’s] right to ply his trade”). “Restrictions
on activities,” the Illinois courts have explained, “should be
narrowly tailored to protect only against activities that
threaten the employer’s interest.” Cambridge Eng’g, 879
N.E.2d at 526 (citation and internal quotation marks omitted).
An employment bar is especially problematic where, as here,
it forecloses work within an entire industry or market seg-
ment. See id. Put another way, Rutledge could switch occupa-
tions, working for Fenix in a noncompetitive capacity without
harm to LKQ’s interests, and still violate the provision. We
have little difficulty concluding that “[s]uch blatant over-
breadth goes far beyond the standard for acceptable activity
restrictions.” Id.
8                                                   No. 23-2330

    But that is not our only concern. The agreements’ geo-
graphic restriction—extending to a 75-mile radius from the
Lake City facility—also gives us pause. When it comes to ge-
ographic limitations within covenants not to compete, “courts
generally look to whether the restricted area is coextensive
with the area in which the employer is doing business.” Law-
rence & Allen, Inc. v. Cambridge Hum. Res. Grp., Inc., 685 N.E.2d
434, 442 (Ill. App. Ct. 1997). Large radiuses might be justified
by evidence that the entire area aligns with the employer’s
competitive market. See, e.g., Midwest Television, Inc. v. Ol-
offson, 699 N.E.2d 230, 235 (Ill. App. Ct. 1998) (holding a 100-
mile non-competition provision reasonable where radio sta-
tion presented evidence that it had a sixty-to-ninety-mile
broadcast range); Shorr Paper Prods, Inc. v. Frary, 392 N.E.2d
1148, 1155 (Ill. App. Ct. 1979) (highlighting evidence that 90%
of the employer’s customers were located within a 100-mile
geographic restriction supported non-compete’s reasonable-
ness). While LKQ insists that the Lake City facility’s market is
coextensive with the provision’s 75-mile radius, the assertion
comes without evidentiary support.
    By any measure, a 75-mile radius is large. It covers a large
swath of the upper third of Florida and extends into Georgia.
Rutledge could not work outside of that range without under-
taking a commute (each way) of over an hour. Remember, too,
that LKQ believes Rutledge breached the provision not by
working at a nearby Fenix facility, but instead by working out
of his Lake City, Florida home for facilities in Texas, New Jer-
sey, Pennsylvania, Massachusetts, North Carolina, and other
locations within Florida—all hundreds of miles from his
home office.
No. 23-2330                                                   9

    Given the totality of these circumstances, we have little
trouble concluding that the Restrictive Covenant Agree-
ments’ non-competition provision is unreasonable. Perhaps
anticipating this outcome, LKQ asks us to “blue pencil” the
provision to comport with the law. We decline the invitation.
Illinois courts “refuse to modify an unreasonable restrictive
covenant … where the degree of unreasonableness renders it
unfair.” Eichmann v. Nat’l Hosp. & Health Care Servs., Inc., 719
N.E.2d 1141, 1149 (Ill. App. Ct. 1999). The district court
heeded this instruction, and so do we, especially where the
overbreadth of the employment restrictions would result in
substantial modification of the terms of the Restrictive
Covenant Agreement.
    We can stop there. Since the provision is unreasonable and
unenforceable, we need not consider Rutledge’s contentions
that the Restrictive Covenant Agreements lacked considera-
tion in the first instance and more generally do not protect le-
gitimate business interests. The district court was right to en-
ter summary judgment for Rutledge on his claim challenging
the Restrictive Covenant Agreements.
                              IV
    That brings us to the most difficult aspect of this appeal—
the forfeiture provision within the Restricted Stock Unit
Agreements. The parties agree that Delaware law governs.
Two weeks before oral argument, the Delaware Supreme
Court reversed the prior Chancery Court decision in Cantor
Fitzgerald and held that forfeiture-for-competition provisions
in limited partnership agreements are not subject to review
for reasonableness. See Cantor Fitzgerald, 2024 WL 315193, at
*13. Cantor Fitzgerald provides a new framework, one not
10                                                  No. 23-2330

available to the district court but which controls our review of
Rutledge’s challenge to the RSU Agreements.
                               A
    A forfeiture-for-competition provision operates differ-
ently than a traditional restrictive covenant. The latter prohib-
its an employee from competing with their former employer.
If breached, the employer can seek injunctive relief to enforce
the employment restriction. But a forfeiture-for-competition
provision imposes a different consequence if a former em-
ployee competes. Instead of prohibiting the competition out-
right, a forfeiture provision, as its name implies, works to
forfeit or claw back a contingent benefit, thereby imposing a
financial burden on the former employee. See Deming v. Na-
tionwide Mut. Ins., 905 A.2d 623, 634 (Conn. 2006).
    Two views have emerged on how to treat these provisions.
See 15 Corbin on Contracts § 80.25 (2023); 6 Williston on Con-
tracts § 13:13 (4th ed. 2023). Some jurisdictions conclude that,
regardless of form, forfeiture provisions function as restraints
on trade and should be reviewed for reasonableness like re-
strictive covenants. See, e.g., Allegis Grp., Inc. v. Jordan, 951
F.3d 203, 210 (4th Cir. 2020) (Maryland law); Deming, 905 A.2d
at 638; Brockley v. Lozier Corp., 488 N.W.2d 556, 563 (Neb.
1992); Cheney v. Automatic Sprinkler Corp. of Am., 385 N.E.2d
961, 965 (Mass. 1979); Harris v. Bolin, 247 N.W.2d 600, 602
(Minn. 1976); Almers v. S.C. Nat’l Bank of Charleston, 217 S.E.2d
135, 138–39 (S.C. 1975). They reason that these provisions, like
restrictive covenants, operate to deter competition, something
that public policy disfavors. Deming, 905 A.2d at 637–38.
   Other jurisdictions are more inclined to embrace an “em-
ployee choice” doctrine, which enforces some forfeiture-for-
No. 23-2330                                                      11

competition provisions under more traditional principles of
contract law without inquiry into their reasonableness. See,
e.g., Lucente v. Int’l Bus. Machs. Corp., 310 F.3d 243, 254 (2d Cir.
2002) (New York law); Rochester Corp. v. Rochester, 450 F.2d
118, 123–24 (4th Cir. 1971) (Virginia law); Schlumberger Tech.
Corp. v. Blaker, 859 F.2d 512, 517 (7th Cir. 1988) (Indiana law);
Trumble v. Farm Bureau Mut. Ins. Co. of Idaho, 456 P.3d 201, 212
(Idaho 2019) (declining to apply reasonableness analysis in
the context of a non-employment contract); Swift v. Shop Rite
Food Stores, Inc., 489 P.2d 881, 883 (N.M. 1971); Van Pelt v.
Berefco, 208 N.E.2d 858, 865 (Ill. 1965) (Massachusetts law).
This view, long considered the majority approach, Cheney, 385
N.E.2d at 964, emphasizes that forfeiture provisions “leave
the ex-employee free to make a living as he chooses.” Schlum-
berger, 859 F.2d at 516. Applying freedom of contract princi-
ples, these courts explain that the affected employee calcu-
lated the cost of choosing to join a competitor and, as a result,
should be held to that choice. See id.; Lucente, 310 F.3d at 254.
   The Delaware Supreme Court recently grappled with
these competing views in Cantor Fitzgerald, 2024 WL 315193.
The dispute there arose in circumstances different than those
here, and the question before us is whether those differences
matter.
    Cantor Fitzgerald is a global financial services firm that
operates under a limited partnership agreement. See id. at *2.
“[T]wo inter-related mechanisms” in Cantor Fitzgerald’s lim-
ited partnership agreement—one a restrictive covenant and
the second a forfeiture-for-competition provision—“discour-
age former partners from competing.” Id. When six partners
voluntarily left Cantor Fitzgerald and joined a competitor
firm, they called the enforceability of both mechanisms into
12                                                  No. 23-2330

question. They did so when seeking to enforce Cantor Fitz-
gerald’s obligation to pay distributions of their capital ac-
counts—capital contributions and profit share—covering a
four-year period. See id. at *2–4.
    Under the forfeiture-for-competition provision, a partner
who “directly competes with the business of the partnership”
forfeits unpaid capital account distributions. Id. at *3–4. “So,
for example, a partner who refrain[ed] from [c]ompetitive
[a]ctivity for two years w[ould] receive distributions during
that period, but, upon commencement of competition in the
third year forfeits distributions thereafter through the fourth
year.” Id. at *4. The forfeiture provision operated “regardless
of the reason a partner cease[d] to be a partner.” Id. at *3. The
other mechanism, a restrictive covenant, prohibited the same
competitive activity for two years and entitled Cantor Fitzger-
ald to withhold distributions and seek injunctive relief. Id. at
*2–3.
    Cantor Fitzgerald invoked both mechanisms to withhold
capital account payments—ranging in value from just under
$100,000 to over $5 million—for the six former partners who
went to work for a competitor. See id. at *4–5. The former part-
ners sued, contending that the mechanisms were unenforcea-
ble restraints on trade. Id. at *5. They prevailed on this ra-
tionale in Delaware Chancery Court.
    On appeal, the Delaware Supreme Court focused review
on the enforceability of the forfeiture-for-competition provi-
sion. Concluding that the provision was not a restraint on
trade, it held that “[w]hen sophisticated parties agree in a lim-
ited partnership agreement that a partner, who voluntarily
withdraws from, and then competes with, the partnership,
will forfeit contingent post-withdrawal financial benefits,
No. 23-2330                                                  13

public-policy considerations weigh in favor of enforcing that
agreement.” Id. at *13.
    The court rejected the Chancery’s view of the forfeiture
provision as analogous to liquidated damages and empha-
sized the context underpinning the dispute, including that the
Delaware Revised Uniform Limited Partnership Act contains
an explicit directive “to give maximum effect to the principle
of freedom of contract.” Id. at *10 (quoting 6 Del. C.
§ 17-1101(c)). The court also saw as “significant” the “distinc-
tion between a restrictive non-competition covenant that pre-
cludes a former employee from earning a living in his chosen
field and an agreement that allows a former partner to com-
pete but at the cost of relinquishing a contingent benefit”—a
difference that weakened any interest in reviewing forfeiture
provisions for reasonableness. Id. at *13.
                               B
    Cantor Fitzgerald lends itself to two interpretations—one
broad and another narrow. On one hand, the Delaware Su-
preme Court was characteristically careful. It grounded its
holding in the facts before it, emphasizing the sophistication
of the parties, type of agreement, and forfeiture of unpaid
contingent benefits. Id. at *13. The court also underscored the
freedom of contract policy considerations expressed by the
Limited Partnership Act, which diverge from “the common
law’s disfavor of forfeitures.” Id. In doing so, the Delaware
Supreme Court acknowledged the possibility that “a public-
policy interest or inequitable outcome could, under some cir-
cumstances, outweigh the interest in freedom of contract en-
shrined in [the Limited Partnership Act.]” Id.
14                                                   No. 23-2330

    But other portions of the Delaware Supreme Court’s opin-
ion suggest a broader application. The court distinguished
generally between restrictive covenants and forfeiture-for-
competition provisions, observing that “[t]he policy interest
that preponderates in [restrictive covenants] is diminished—
if it does not vanish—in [forfeiture-for-competition provi-
sions].” Id. It also emphasized that “[t]he courts of [Delaware]
hold freedom of contract in high—some might say, reveren-
tial—regard.” Id. at *1. And when discussing how jurisdic-
tions approach forfeiture provisions, the Delaware Supreme
Court disagreed with the Third Circuit’s prediction in Pollard
v. Autotote, Ltd., 852 F.2d 67 (3d Cir. 1988), amended by 872 F.2d
1131 (3d Cir. 1988), that Delaware would review a forfeiture
provision in a general manager’s deferred compensation in-
centive plan for reasonableness. Cantor Fitzgerald, 2024 WL
315193, at *11 n.102. These parts of the Delaware Supreme
Court’s reasoning support a broader reading of Cantor
Fitzgerald.
    Even if a broad reading is the better reading, we see mean-
ingful differences between this case and Cantor Fitzgerald that
the Delaware Supreme Court may view as important. Perhaps
foremost, the strong policy considerations raised by the Lim-
ited Partnership Act are not present here. Rutledge did not
agree to the forfeiture provision in a partnership agreement
or other specialized contract. Rather, he signed an ordinary
corporate contract as part of LKQ’s restricted stock program.
Nor was Rutledge a partner or company executive repre-
sented by counsel. He worked his entire career at LKQ as a
middle manager. The facts make it hard to see how the Lim-
ited Partnership Act’s directive to give maximum effect to
freedom of contract applies here.
No. 23-2330                                                    15

    The consequences of a breach also differ. In Cantor Fitzger-
ald, the breach excused the company from paying contingent
distributions of a limited partner’s earned capital. Here, how-
ever, Rutledge’s alleged breach would forfeit the grant of
stock or any proceeds from the sale of those shares. LKQ’s
RSU Agreements contain no limit on how far back the forfei-
ture applied, notwithstanding how much time had passed
since Rutledge executed each agreement. In application, that
would allow LKQ to claw back stock proceeds long vested
and sold. Indeed, LKQ seeks to clawback eight years of stock
award proceeds, worth hundreds of thousands of dollars (at
least $600,000), from a middle manager making a modest sal-
ary (about $109,000).
    Finally, a subset of the RSU Agreements also entitled LKQ
to seek injunctive relief. Although LKQ never acted on this
right, a hallmark of forfeiture provisions is that they are not
enforceable through injunctive relief. Id. at *13. This, too, dif-
fers from the circumstance before the Delaware Supreme
Court in Cantor Fitzgerald.
                                C
    As a federal court sitting in diversity, our obligation is to
“predict how the state’s highest court would answer the ques-
tion presented.” Cage v. Harper, 42 F.4th 734, 739 (7th Cir.
2022). But here we are unable to predict with confidence how
broadly Delaware courts would apply Cantor Fitzgerald, leav-
ing us to conclude that the most prudent course is to invite
the opinion of the only body that can definitively construe
Delaware law—the Delaware Supreme Court.
   Jurisdictions remain divided on how to treat forfeiture
provisions, and the Delaware Supreme Court has only
16                                                   No. 23-2330

recently weighed in. See Cantor Fitzgerald, 2024 WL 315193, at
*1; Deming, 905 A.2d at 634–35 (collecting cases); Annot. 81
A.L.R.2d 1066 (1962); Annot. 18 A.L.R.3d 1246 (1968). While
Cantor Fitzgerald considered the public policy considerations
in a limited partnership agreement, forfeiture provisions ap-
pear in a host of other contracts connected to stock, deferred
compensation, and other incentive programs. The enforcea-
bility of those provisions, and whether reasonableness review
applies, likely has far reaching impacts on corporations and
their employees. Given the importance of stability, predicta-
bility, and uniformity in Delaware corporate law, see Stream
TV Networks, Inc. v. SeeCubic, Inc., 279 A.3d 323, 353–54 (Del.
2022), we see the Delaware Supreme Court as best suited to
provide guidance on how best to read Cantor Fitzgerald.
    Delaware law allows the certification of state law ques-
tions by federal courts of appeals directly to the Delaware Su-
preme Court, Del. Sup. Ct. R. 41(a)(ii), so we respectfully cer-
tify the following questions:
       (1) Whether Cantor Fitzgerald precludes review-
           ing forfeiture-for-competition provisions for
           reasonableness in circumstances outside the
           limited partnership context?
       (2) If Cantor Fitzgerald does not apply in all other
           circumstances, what factors inform its appli-
           cation? For example, does it matter what
           type of agreement the forfeiture provision
           appears in, how sophisticated the parties
           are, whether the parties retained counsel to
           review the provision, whether the forfeiture
           involves a contingent payment or claw back,
           how far backward a claw back reaches,
No. 23-2330                                                 17

          whether the employee quit or was involun-
          tarily terminated, or whether the provision
          also entitled the company to injunctive re-
          lief?
    We do not intend this formulation to limit the Delaware
Supreme Court’s considerations, and we invite the court to
refine these questions as it deems appropriate.
    In certifying these questions, we also recognize that the
case will return to us for applying any legal guidance the Del-
aware Supreme Court chooses to provide to us and all other
courts sure to grapple with how best to read Cantor
Fitzgerald.
                              V
    For these reasons, we certify these questions to the Dela-
ware Supreme Court. We otherwise affirm the district court’s
entry of judgment for Rutledge on the breach of the Restric-
tive Covenant Agreements and unjust enrichment claims.
                                        QUESTIONS CERTIFIED.