A Delaware court has denied a preliminary injunction sought by GI DI Rushmore Parent L.P. against Donald E. Stoops, Jr., a former executive at Bluepeak, a telecommunications company. The court ruled that it lacks personal jurisdiction over Stoops, who had left Bluepeak to join a competitor. This decision has implications for employment contracts and restrictive covenants, particularly regarding enforcement across state lines.
The case, GI DI Rushmore Parent, LP v. Donald E Stoops, Jr., C.A. No. 2026-0505-JTL, was filed on June 10, 2026, in the Court of Chancery of Delaware. The ruling is significant for employees and employers alike, as it addresses the enforceability of restrictive covenants and jurisdictional issues in employment agreements.
Background
GI DI Rushmore Parent L.P. (Holdco) is a holding company controlled by a private equity firm that owns Clarity Telecom LLC, which operates as Bluepeak. Donald E. Stoops, Jr. was recruited by Bluepeak to serve as its Vice President for New Market Activity. After resigning from his previous employer, Stoops was presented with an Incentive Unit Grant Agreement, which included restrictive covenants that would limit his employment options for two years after leaving Bluepeak.
The dispute arose when Stoops decided to leave Bluepeak and join Dobson Fiber, a direct competitor. Holdco filed for a preliminary injunction to prevent Stoops from working at Dobson, citing the restrictive covenants in the Unit Agreement. However, Stoops contended that the Delaware Forum Clause in the Partnership Agreement, which was not disclosed to him prior to signing, could not be enforced against him.
The Ruling
The court ruled against Holdco's request for a preliminary injunction, stating that it had not established a reasonable likelihood of success in proving that it could exercise personal jurisdiction over Stoops. Vice Chancellor Laster, who presided over the case, noted, "Regardless of whether Oklahoma law or Delaware law applies, the Delaware Forum Clause cannot support the exercise of personal jurisdiction over Stoops."
The court emphasized that Stoops had no meaningful ties to Delaware, as he had only signed the Unit Agreement without having access to the Partnership Agreement that contained the Delaware Forum Clause. The court found that Stoops was not adequately informed about the terms of the Partnership Agreement, which undermined Holdco's argument for jurisdiction based on the Delaware Forum Clause.
Impact
This ruling has significant implications for both employers and employees regarding the enforceability of restrictive covenants in employment agreements. It highlights the importance of transparency in employment contracts, particularly when it comes to clauses that may limit an employee's ability to work in their chosen field after leaving a job. The court's decision indicates that employers cannot rely solely on undisclosed agreements to enforce restrictive covenants against employees.
Furthermore, the ruling underscores the role of state laws in determining the validity of forum selection clauses. The court noted that Oklahoma law, which protects employees from being forced into litigation in other states, invalidated the Delaware Forum Clause. This sets a precedent for other cases involving employment contracts that cross state lines, potentially leading to more litigation over jurisdictional issues.
What's Next
Holdco may consider appealing the decision, although the court's clear stance on personal jurisdiction presents a significant hurdle. There are no related cases pending at this time, but the outcome of this case may influence future disputes involving restrictive covenants and jurisdictional challenges in employment law.