The Delaware Supreme Court recently reversed a Chancery Court decision involving important issues related to “forfeiture for competition” provisions in partnership agreements. Such provisions are often used by fund managers and others to structure deferred compensation arrangements and disincentivize senior personnel from departing and competing. In Cantor Fitzgerald, L.P. v. Ainslie (Ainslie), the Supreme Court reversed and remanded the decision we reported on in March 2023, ruling that when sophisticated parties, in a contract governed by the Delaware Revised Uniform Limited Partnership Act, “agree that a departing partner will forfeit a specified benefit should he engage in competition with the partnership, [Delaware] courts should, absent unconscionability, bad faith, or other extraordinary circumstances, hold them to their agreements.” In doing so, the Supreme Court wrote favorably of the employee-choice doctrine but did not expressly adopt it as part of Delaware law. This guest article by Friedman Kaplan partners Lance J. Gotko and Asaf Reindel discusses the key holdings of the Supreme Court’s decision, as well as updated practical considerations for fund managers in light of the reversal. For the authors’ previous article on the Chancery Court’s decision, see “Delaware Chancery Court Strikes Down Employee Restrictive Covenants in a Partnership Agreement” (Mar. 16, 2023).