IN THE COURT OF CHANCERY OF THE STATE OF DELAWARE
APRIO ADVISORY GROUP, LLC.
EVOLUTION BUYER, LLC, and
EVOLUTION PARENT HOLDINGS, LLC,
Plaintiffs,
v. C.A. No. 2026-0508-JTL
DIMITRI ALEXEEV,
Defendant.
MEMORANDUM OPINION GRANTING RULE 12(B)(2) MOTION
Date Submitted: June 15, 2026
Date Decided: October 16, 2026
Timothy M. Holly, CONNOLLY GALLAGHER LLP, Wilmington, Delaware; Cary Ichter, ICHTER DAVIS LLC, Atlanta, Georgia; Attorneys for Plaintiffs.
John A. Sensing, Callan R. Jackson, POTTER ANDERSON & CORROON LLP, Wilmington, Delaware; Attorneys for Defendant.
LASTER, V.C.
An employee owned a small equity interest in his accounting firm’s parent
company. A private-equity-backed sponsor acquired the parent company. As a
condition to the acquisition, the buyer required that everyone who owned equity in
the acquired entity enter into agreements containing restrictive covenants. The
employee signed one.
The employee left his firm and began to compete. The buyer sued the employee
in this court. The employee moved to dismiss on various grounds, including lack of
personal jurisdiction.
The only basis on which this court could exercise personal jurisdiction over the
employee is a provision in the agreement containing the restrictive covenants. That
provision vests exclusive jurisdiction in this court and provides that Delaware law
governs the agreement.
The employee is a California resident who signed the agreement containing
the restrictive covenants in California, performed in California, and allegedly
breached the provisions in California. By statute, California prohibits employers from
requiring employees to agree to litigate in a foreign state under foreign law as a
condition of their employment.
Consistent with prior decisions of this court, this decision holds that the
California statute renders the Delaware forum and Delaware law provisions voidable
at the employee’s election. By challenging the existence of personal jurisdiction, the
employee has made that election. The provisions are therefore invalid.
The provisions cannot support personal jurisdiction, and no other basis for
personal jurisdiction exists. The case is dismissed for lack of personal jurisdiction.
I. FACTUAL BACKGROUND
The facts are drawn from the complaint, the documents it incorporates by
reference, and other filings on the docket.1 At this procedural stage, the complaint’s
well-pled allegations are assumed to be true, and all reasonable inferences are drawn
in the plaintiff’s favor.
A. The Merger
Dimitri Alexeev was a partner in Aprio LLP (the “Firm”), an accounting firm.
The Firm was a subsidiary of Aprio Advisory Group LLC (“Holdco”), a holding
company. Alexeev owned equity in Holdco.
Evolution Parent Holdings, LLC (the “Buyer”) is an acquisition vehicle backed
by Charlesbank Capital Partners, LLC (the “Sponsor”). Through a merger, the Buyer
acquired all of the equity in Holdco (the “Merger”). The Merger closed on August 1,
2024.
Under the agreement governing the Merger (the “Merger Agreement”),
Alexeev’s equity interest in Holdco was converted into the right to receive specified
1 Citationsin the form “Compl. ¶ ___” refer to paragraphs of the verified amended complaint, which is the operative pleading. Citations in the form “Ex. ___ at ___” refer to exhibits to the complaint. Citations in the form “OB Ex. ___ at ___” and “AB Ex. ___ at ___” refer to exhibits to defendant’s opening brief and plaintiff’s answering brief, respectively.
2
consideration. 2 Alexeev received approximately $1 million in consideration,
comprising 445,918.27 Buyer member units valued at $1 per unit, plus deferred cash
consideration of $531,003.10, payable in May 2025.
B. The Challenged Agreement
As a condition to the Acquisition, the Buyer demanded that each holder of
Holdco equity sign a restrictive covenant agreement. Alexeev signed one (the
“Challenged Agreement”). 3 The formal parties to the Challenged Agreement are
Alexeev, Buyer, and Holdco.
The Challenged Agreement imposes a series of restrictive covenants that
would typically appear in an employment agreement. They include:
• A restriction prohibiting Alexeev from competing with the Firm (the
“Competition Restriction”);
• Restrictions prohibiting Alexeev from soliciting any of the Firm’s employees,
vendors, partners, and clients (the “Solicitation Restriction”); and
• Restrictions prohibiting Alexeev from using the Firm’s confidential
information (the “Confidentiality Restriction”).4
2 Ex. A § 2.10 (cited as “MA”).
3 Ex. B (cited as “Agr.”).
4 Id. § 3.
3
Those restrictions (together, the “Covenants”) apply during a “Restricted Period,”
defined as a period starting when the Acquisition closed and ending three years
later.5
The Challenged Agreement does not contain a choice-of-law or choice-of-forum
provision. Instead, it incorporates a section of the Merger Agreement.6 The Merger
Agreement calls for Delaware law to govern its terms (the “Delaware Law
Provision”).7 It also designates courts in the state of Delaware as the exclusive form
for “any action, suit, or proceeding with respect to any matter arising out of or relating
to this Agreement, any other Transaction Document, any Schedules hereto and the
other documents, instruments and agreements referred to herein or therein or
delivered pursuant hereto or thereto. . . .” (the “Delaware Forum Provision”).8
5 Id. (“[T]he period between the Closing Date and the date that is
3 years
following the Closing Date.”). The Complaint alleges the Restricted Period is five years, but the Agreement says three years.
6 See
id. § 16 (“Governing Law; Jurisdiction; WAIVER OF JURY TRIAL.
Section 10.13 of the Merger Agreement is hereby incorporated herein by reference mutatis mutandis.”).
MA § 10.13 (“This Agreement will be governed by, and construed in
7
accordance with, the Laws of the State of Delaware without regard to the conflict of Laws rules of any state.”).
8 Id.
4
C. Alexeev Leaves The Firm.
On October 27, 2025, Alexeev resigned from the Firm. The Buyer9 later learned
that Alexeev had created Pheonix Tax LLC and was acting as its managing member.
After his departure, some of the Firm’s clients contacted the Firm about
moving their accounts to Alexeev’s new firm. By letter dated December 19, 2025, the
Buyer reminded Alexeev of the Challenged Agreement and the Covenants it contains.
D. This Litigation
On April 20, 2026, the Buyer filed this suit. 10 The complaint contains four
counts:
• Count I asserts that Alexeev breached the Covenants in the Challenged
Agreement.
• Count II asserts that Alexeev tortiously interfered with the Buyer’s business
relationships.
• Count III asserts Alexeev misappropriated confidential and propriety business
information in violation of California Uniform Trade Secrets Act.11
• Count IV asserts Alexeev misappropriated trade secrets in violation of the
federal Defend Trade Secrets Act.12
9 After the closing of the Merger, the Buyer controlled Holdco and the Firm.
For simplicity, this decision speaks in terms of the Buyer taking action, even when the Buyer technically caused one of its affiliates to act.
10 The plaintiffs are the Buyer, Holdco, and Evolution Buyer LLC, which is a
member of the Buyer and wholly owned by the Sponsor. This decision refers generally to the Buyer except where the context requires referring to a specific entity.
11 Cal. Civ. Code § 3426.
12 18 U.S.C. § 1836.
5
Alexeev moved to dismiss the complaint on multiple grounds. He argues under
Rule 12(b)(2) that this court cannot exercise personal jurisdiction over him. He
contends under Rule 12(b)(3) that venue in this court is improper. And he asserts
under Rule 12(b)(6) that the complaint fails to state any claim on which relief can be
granted.
This decision only reaches the issue of personal jurisdiction under Rule
12(b)(2).
II. LEGAL ANALYSIS
Alexeev seeks dismissal under Rule 12(b)(2) on the grounds that this court
cannot exercise jurisdiction over him. As the sole basis for this court’s exercise of
personal jurisdiction, the Buyer relies on the Delaware Forum Provision, which it
seeks to interpret under the Delaware Law Provision. But those provisions cannot
support personal jurisdiction over Alexeev because California law renders them
voidable at Alexeev’s request. Alexeev has challenged their effectiveness by
contesting jurisdiction, and they cannot provide a basis for jurisdiction in this court.
A. Standard For A Rule 12(b)(2) Motion
“When a defendant moves to dismiss a complaint pursuant to Court of
Chancery Rule 12(b)(2), the plaintiff bears the burden of showing a basis for the
court's exercise of jurisdiction over the defendant.”13 Determining whether the court
has jurisdiction over a defendant engages a two-step analysis, “the court must first
13 Ryan v. Gifford, 935 A.2d 258, 265 (Del. Ch. 2007).
6
determine that service of process is authorized by statute and then must determine
that the exercise of jurisdiction over the nonresident defendant comports with
traditional due process notions of fair play and substantial justice.”14 The court may
consider the pleadings, affidavits, and any discovery of record. If there has not been
an evidentiary hearing, the plaintiff “need only make a prima facie showing of
personal jurisdiction and ‘the record is construed in the light most favorable to the
plaintiff.’”15
A defendant can consent to a court’s exercise of personal jurisdiction. If the
consent is valid, then it obviates the need to conduct the formal Rule 12(b)(2)
analysis.16
A forum selection provision in a contract can provide the necessary consent.
“Where the parties to the forum selection clause have consented freely and knowingly
to the court's exercise of jurisdiction, the clause is sufficient to confer personal
jurisdiction on a court.”17
To support personal jurisdiction over Alexeev, the Buyer relies exclusively on
the Delaware Forum Provision, which it interprets under the Delaware Law
14 Id.
15 Id. (footnote omitted).
16 See Cap. Gp. Cos., Inc. v. Armour, 2004 WL 2521295, at *2 (Del. Ch. Oct. 29,
2004).
17 Nat’l Indus. Gp. (Hldg.) v. Carlyle Inv. Mgmt. L.L.C., 67 A.3d 373, 381 (Del.
2013).
7
Provision. Alexeev’s Rule 12(b)(2) motion rises or falls based on the validity of those
provisions.
B. Voidability Under California Law
Alexeev contends that the Delaware Forum Provision and Delaware Law
Provision are voidable under California law. He is correct. Those provisions therefore
cannot provide a basis for this court’s exercise of personal jurisdiction.
California has enacted a statute that renders both choice-of-forum and choiceof-law provisions voidable at the request of an employee when those provisions
appear in an agreement that the employee was required to sign “as a condition of
employment.”18 The statute states:
(a) An employer shall not require an employee who primarily resides
and works in California, as a condition of employment, to agree to a
provision that would do either of the following:
(1) Require the employee to adjudicate outside of California a
claim arising in California.
(2) Deprive the employee of the substantive protection of
California law with respect to a controversy arising in California.
(b) Any provision of a contract that violates subdivision (a) is voidable
by the employee, and if a provision is rendered void at the request of the
employee, the matter shall be adjudicated in California and California
law shall govern the dispute.19
18 Cal. Lab. C. § 925(a).
19 Id. § 925.
8
Whether that statute applies presents a threshold question of choice of law. If the
statute applies, then the court must determine whether the Delaware Forum
Provision and the Delaware Law Provision violate its terms.
1. Choice Of Law
When determining what law governs a contract, Delaware follows the
Restatement (Second) of Conflict of Laws.20 It provides that if the parties to a contract
have selected the law of a particular jurisdiction to govern their agreement, then
“[t]he law of the state chosen by the parties to govern their contractual rights and
duties will be applied,” unless either
(a) the chosen state has no substantial relationship to the parties or the
transaction and there is no other reasonable basis for the parties' choice,
or
(b) application of the law of the chosen state would be contrary to a
fundamental policy of a state which has a materially greater interest
than the chosen state in the determination of the particular issue and
which, under the rule of § 188, would be the state of the applicable law
in the absence of an effective choice of law by the parties.21
Here, the Delaware Law Provision passes muster under Section 187(a) but fails under
Section 187(b).
20 Certain Underwriters at Lloyds, London v. Chemtura Corp., 160 A.3d 457,
464 (Del. 2017).
21 Restatement (Second) of Conflict of Laws § 187 (1971).
9
a. Delaware Has a Substantial Relationship To The Parties
Or The Transaction.
The first step in evaluating a choice-of-law provision is to determine whether
the parties selected the law of a state with “no substantial relationship to the parties
or the transaction and there is no other reasonable basis for the parties' choice.”22
The Challenged Agreement incorporates the Delaware Law Provision from the
Merger Agreement.
Delaware has a sufficient relationship to the parties to be a viable selection.
Commentary to the Restatement explains that “[w]hen the state of the chosen law has
some substantial relationship to the parties or the contract,” then the parties have a
reasonable basis for their choice of law.23 A substantial relationship exists “when this
state is that where performance by one of the parties is to take place or where one of
the parties is domiciled or has his principal place of business.”24 The Buyer and its
affiliate, Evolution Buyer, LLC, are both Delaware limited liability companies,
making Delaware their domicile. Under the Restatement, that connection provides a
reasonable basis for selecting Delaware Law.
By statute, Delaware takes a more assertive position than the Restatement
about when a substantial relationship exists. When a contract governs a transaction
involving $100,000 or more and the parties agree that the contract “shall be governed
22 Id. § 187(a).
23 Id. cmt. f.
24 Id.
10
by or construed under the laws of this State, without regard to principles of conflict
laws,” then that provision “shall conclusively be presumed to be a significant,
material and reasonable relationship with this State and shall be enforced whether
or not there are other relationships with this State.”25 No one has argued against that
statute’s application, whether under the Restatement test or otherwise. The Delaware
Law Provision standing alone therefore establishes a significant, material, and
reasonable relationship with Delaware, providing a reasonable basis for selecting
Delaware law.
b. California Is The Default State
The next step in a choice-of-law analysis is to determine “what state's law
would apply but for the Delaware choice-of-law provision.”26 The Buyer argues for
Delaware law; Alexeev argues for California law.
Absent a binding choice-of-law clause, Section 6 of the Restatement calls for
applying the law of the jurisdiction with the most significant relationship to the issue
in dispute. 27 A court determines which jurisdiction has the most significant
relationship by considering the following factors,
(a) the needs of the interstate and international systems,
(b) the relevant policies of the forum,
25 6 Del. C. § 2708(a).
26 FP UC Hldgs., LLC v. Hamilton, 2020 WL 1492783, at *9 (Del. Ch. Mar. 27,
2020).
27 See Certain Underwriters, 160 A.3d at 465.
11
(c) the relevant policies of other interested states and the relative
interests of those states in the determination of the particular issue,
(d) the protection of justified expectations,
(e) the basic policies underlying the particular field of law,
(f) certainty, predictability and uniformity of result, and
(g) ease in the determination and application of the law to be applied.28
Other sections of the Restatement provide guidance on how to apply those factors to
particular types of disputes.29
Section 188 provides guidance on applying the factors to a contract dispute. It
states,
(1) The rights and duties of the parties with respect to an issue in
contract are determined by the local law of the state which, with respect
to that issue, has the most significant relationship to the transaction
and the parties under the principles stated in § 6.
(2) In the absence of an effective choice of law by the parties (see § 187),
the contacts to be taken into account in applying the principles of § 6 to
determine the law applicable to an issue include:
(a) the place of contracting,
(b) the place of negotiation of the contract,
(c) the place of performance,
(d) the location of the subject matter of the contract, and
(e) the domicil, residence, nationality, place of incorporation and
place of business of the parties.
28 Restatement, supra, § 6(2).
29 See Certain Underwriters, 160 A.3d at 465.
12
These contacts are to be evaluated according to their relative
importance with respect to the particular issue.
(3) If the place of negotiating the contract and the place of performance
are in the same state, the local law of this state will usually be applied,
except as otherwise provided in §§ 189- 199 and 203.30
Those factors point to California law.
The first factor is place of contracting. Under the Restatement, “the place of
contracting is the place where occurred the last act necessary, under the forum's rules
of offer and acceptance, to give the contract binding effect.”31 “Standing alone, the
place of contracting is a relatively insignificant contact.”32 This factor nevertheless
points to California, where Alexeev executed the Challenged Agreement.
The second factor is the place of the negotiations. The Restatement states that
“where the parties negotiate and agree on the terms of their contract” is “a significant
contact,” but that is contact has “less importance when there is no one single place of
negotiation and agreement, as, for example, when the parties do not meet but rather
conduct their negotiations from separate states by mail or telephone.” 33 The
pleadings suggest that no negotiations took place. The Challenged Agreement was a
form agreement that the Buyer presented to Alexeev on a take-it-or-leave-it basis.
30 Restatement, supra, § 188.
31 Id. cmt. e.
32 Id.
33 Id.
13
This factor does not apply. To the extent it applies, it favors California, where Alexeev
was presented with the Challenged Agreement.
The third factor looks to the place of performance. The Restatement regards
this factor as the most important, explaining “the state where performance is to occur
has an obvious interest in the question whether this performance would be illegal.”34
The place of performance for purposes of the Challenged Agreement was California.
That is where Alexeev worked and where his alleged violations of the Covenants took
place.
The fourth factor considers the location of the contract’s subject matter.
Because the Covenants applied to Alexeev, the subject matter of the contract was
located where he lived and worked. The location of the contract’s subject matter was
therefore California.
The fifth factor considers the domicile, residence, state of incorporation, or
principal place of business of the parties. The formal parties to the Challenged
Agreement are Alexeev, Buyer, and Holdco.
Alexeev is a human domiciled in California. The Buyer and one of its affiliate
are Delaware limited liability companies, but the affiliate is not a party to the
Challenged Agreement. Holdco is a Georgia limited liability company and a party to
the Challenged Agreement. The Firm is a Georgia limited liability company, and the
34 Id.
14
Sponsor is a Massachusetts limited liability company. Neither is a party to the
Challenged Agreement.
The Restatement cautions that “with respect to most issues, a corporation's
principal place of business is a more important contact than the place of
incorporation, and this is particularly true in situations where the corporation does
little, or no, business in the latter state.”35 The plaintiffs have not identified their
principal places of business, and it seems likely they are holding companies that
either lack substantial business operations of their own or operate through
subsidiaries. The plaintiffs’ failure to identify their principal places of business when
it would be easy to do so supports an inference that the information, if provided, would
have been adverse.36
35 Id.
36 Smith v. Van Gorkom, 488 A.2d 858, 878 (Del. 1985) (subsequent history
omitted) (“[It is a well established principle that the production of weak evidence when strong is, or should have been, available can lead only to the conclusion that the strong would have been adverse.” (citing Interstate Circuit v. United States, 306 U.S. 208, 226 (1939); Deberry v. State, 457 A.2d 744, 754 (Del. 1983))); accord Kahn v. Lynch Commc’n Sys., Inc., 638 A.2d 1110, 1119 n.7 (Del. 1994) (“As we have previously noted, the production of weak evidence when strong is, or should have been, available can lead only to the conclusion that the strong would have been adverse.”); see Barbey v. Cerego, Inc., 2023 WL 6366055, at *8 (Del. Ch. Sep. 29, 2023) (“Intervenor’s production hurts, rather than helps, his case. . . . The Screenshots do not include any metadata from the Emails, and therefore are weak evidence. The Emails in their native format would contain metadata verifying their authenticity, and therefore would be strong evidence. . . . Intervenor produced weak evidence – the Screenshots – when strong evidence – the Emails in native format – was, or should have been, available. . . . [F]ailure to produce the Emails in their native format ‘can only lead to the conclusion’ that they would have been adverse to Intervenor’s case.”), aff’d sub nom. Barbey v. Young, 319 A.3d 908 (Del. 2024); Chesapeake Corp. v. Shore, 771 A.2d 293, 300–01 & n.7 (Del. Ch. 2000) (relying on principle from Van Gorkom
15
There is thus one party to the Challenged Agreement with a connection to
Delaware, and that connection is the Buyer’s status as a Delaware entity. Outside of
issues implicating an entity’s internal affairs, the Restatement regards that
connection as both weak and less important than the Buyer’s principal place of
business, which is unknown. The other parties to the Challenged Agreement are
Alexeev, a natural person domiciled in California, and Holdco, a Georgia entity.
Among those ties, the Buyer’s status as a Delaware entity does not predominate.
To strengthen its Delaware connection, the Buyer has pointed to a non-party
affiliate that is also a Delaware entity. That does not help, because the Buyer also
has non-party affiliates that are Georgia and Massachusetts entities. On these facts,
entity status is not a significant factor when determining the default choice of law.
The Restatement calls for giving preponderant weight to the places of
negotiation and performance. When those are the same, “the local law of this state
will usually be applied.”37 That state is California.
The Restatement factors, considered as a whole, also point to California. There
is only one tie to Delaware, and that is the state of incorporation of one of the parties
to the Challenged Agreement.
and Kahn where “defendants chose not to have any of the key insiders at Shorewood testify at trial,” so the court “never got to hear the ‘Shorewood board’s story’ from its leader, Marc Shore, or one of its top managers”).
37 Restatement, supra, § 188(3).
16
But for the Delaware Law Provisions, California law would govern. California
is therefore the default state.
c. The Existence Of A Conflict
The next step in the choice-of-law analysis is to determine “if there is an actual
conflict between the laws of the different states each party urges should apply.”38 To
make this determination, a court compares the laws from the competing jurisdictions
to determine whether they conflict on a relevant point.39
If Section 925 applies, then true conflict exists between California and
Delaware law over the effectiveness of the Delaware Forum Provision and Delaware
Law Provision. California would render those provisions voidable at the request of an
employee.40 By contrast, Delaware law generally enforces choice-of-forum and choiceof-law provisions.41 To avoid the conflict, the Buyer contends that Section 925 does
not apply.
On its face, Section 925 governs this case. Alexeev is an employee who
primarily resides and works in California and Buyer required Alexeev to sign an
38 Certain Underwriters, 160 A.3d at 464.
39 See, e.g., Deuley v. DynCorp Int'l, Inc., 8 A.3d 1156, 1162–65 (Del. 2010)
(comparing laws of Delaware and Dubai); Silverberg v. Padda, 2019 WL 4566909, at *12 (Del. Ch. Sept. 19, 2019) (comparing pleading requirements of four jurisdictions).
40 Cal Lab. C. § 925(b).
41 See, e.g., Carlyle, 67 A.3d at 381; J.S. Alberici Const. Co. v. Mid–West Conveyor Co., 750 A.2d 518, 520 (Del. 2000).
17
agreement to litigate in a foreign state under foreign law as a condition of his
employment.
(i) Alexeev’s Status As A Partner
The Buyer argues that Section 925 does not apply because Alexeev was a
partner of the Firm, not an employee. The Buyer reasons that because Alexeev was
not an employee, he could not have signed the Challenged Agreement as a condition
of employment. They conclude that Section 925 therefore cannot apply. Unfortunately
for the Buyer, Alexeev qualifies as an employee for purposes of Section 925.
There is virtually no California authority interpreting who qualifies as an
employee for purposes of Section 925. California authorities from other contexts
deploy a fact-specific analysis when determining whether an individual with a
“partner” title nevertheless qualifies as an employee for purposes of its labor laws.
One instructive case is Ramos.42 There, the California First District Court of
Appeals considered whether a lawyer who held the title of “partner” qualified as an
employee for purposes of whether she could bring claims under the California Fair
Employment and Housing Act. 43 The court focused on whether the internal
governance structure of the firm revealed power imbalance such that the lawyer was
more akin to an employee than an owner-manager. 44 The lawyer was an income
42 Ramos v. Super. Ct., 239 Cal. Rptr. 3d 679 (Ct. App. 2018).
43 Id. at 692.
44 Id. at 694.
18
partner who did not own equity in the firm and could be expelled “for any reason” by
a vote of two-thirds of the equity partners.45 The firm also had an executive committee
of equity partners who exercised “complete and sole management of the
Partnership.”46 The court held that the power imbalance between the employee and
firm management demonstrated that she was an employee for purposes of the statute
at issue.47
Another instructive case is Strother. 48 There, a physician with the title
“partner” sued under California’s Fair Employment and Housing Act. The United
States Court of Appeals for the Ninth Circuit explained that “determining whether
an individual is an ‘employee’ typically requires a factual inquiry which goes beyond
merely the partnership agreement and the ‘partner’ label.”49 The court cautioned that
the analysis should examine “the true relationship among partners, including the
method of compensation, the ‘partner’s’ responsibility for partnership liabilities, and
the management structure and the ‘partner's’ role in that management, to determine
if an individual should be treated as a partner or an employee for the purpose of
45 Id.
46 Id.
47 Id.
48 Strother v. S. Cal. Permanente Med. Gp., 79 F.3d 859 (9th Cir. 1996).
49 Id. at 867.
19
employment discrimination laws.”50 The court concluded that because the affairs of
the partnership were predominantly conducted by the board, her compensation was
determined by her performance, she could be disciplined for poor performance, and
there was a large number of partners, the lower court erred in determining that the
physician could plead no set of facts to show that she was an employee.51
Decisions from other jurisdictions call for similar inquiries. Most notably, in
Clackamas, the Supreme Court of the United States considered whether four
shareholders who owned the corporation and made up the board of directors counted
as employees.52 The Court explained that the question of whether a partner, officer,
board member, or major shareholder qualifies as an employee is based on six EEOC
factors, which focus mainly on the level of control the individual is subjected to.53 The
six factors are,
Whether the organization can hire or fire the individual or set the
rules and regulations of the individual's work
Whether and, if so, to what extent the organization supervises the
individual's work
Whether the individual reports to someone higher in the
organization
Whether and, if so, to what extent the individual is able to
influence the organization
50 Id.
51 Id. at 867–68.
52 Clackamas Gastroenterology Assocs., P. C. v. Wells, 538 U.S. 440, 442 (2003).
53 Id. at 449.
20
Whether the parties intended that the individual be an employee,
as expressed in written agreements or contracts
Whether the individual shares in the profits, losses, and liabilities
of the organization.54
The Court further highlighted that “[t]he mere fact that a person has a particular
title—such as partner, director, or vice president—should not necessarily be used to
determine whether he or she is an employee or a proprietor.”55 The Court reversed
the judgement and remanded for further proceedings emphasizing that “the answer
to whether a shareholder-director is an employee depends on ‘all of the incidents of
the relationship . . . with no one factor being decisive.’”56
Taking into account the purpose of Section 925, the fact-specific inquiry
envisioned by Ramos, Strother, and Clackamas mandates the conclusion that Alexeev
was an employee for purposes of Section 925. As a threshold matter, “[i]t is evident
from the text of Section 925 that the statute's intent is to provide a California-based
employee with a California forum to litigate employment-related claims if the terms
of his or her employment change on or after January 1, 2017.”57 Classifying Alexeev
as an employee upholds the protective intent of Section 925 and avoids the statute
being easily circumvented.
54 Id. at 449–50.
55 Id. at 450.
56 Id. at 451 (quoting NLRB v. United Ins. Co. of Am., 390 U.S. 254, 258 (1968)).
57 LGCY Power, LLC v. Super. Ct., 291 Cal. Rptr. 3d 50, 58–59 (2022).
21
Sometimes, determining employee status might require discovery and a
hearing. Alexeev’s employee status can be determined now.
To bolster Alexeev’s status as a partner, the Buyer relies on the Fifth Amended
and Restated Operating Agreement of Holdco, which granted Alexeev Class A units
(the “Holdco Agreement”). Alexeev joined Holdco by executing a joinder agreement to
the Holdco Agreement.58
As a Class A member, Alexeev had minimal rights. Section 4.2 of the Holdco
Agreement, titled “Limited Rights of Members,” states,
The Members acknowledge and agree that the business and affairs of
the Company shall be managed exclusively by the Managing Partner &
CEO, subject to the limited approval rights reserved to the Board of
Directors and the Class A Members pursuant to the terms of this
Agreement. Except as otherwise specifically provided under this
Agreement or non-waivable provisions of applicable law, (i) the
Members shall have no part in, and shall not interfere in any manner
with, management or control of the Company and shall have no
authority or right to act on behalf of the Company or to bind the
Company in connection with any matter, and (ii) no Member shall take
part in, or interfere in any manner with, the conduct or control of the
Company business, and no Member shall have any right or authority to
act or sign for, or to obligate the Company.59
Alexeev had no authority to act on Holdco’s behalf or participate in management.
Instead, he was subject to managerial control. Under Ramos, Strother, and
Clackamas, that power imbalance and level of non-control qualifies Alexeev as an
employee.
58 Walker Aff. ¶¶ 4–5.
59 AB Ex. B § 4.2.
22
Consistent with that conclusion, Holdco recognized Alexeev as an employee
rather than a partner on multiple occasions:
• “Alexeev was a beneficial owner of an equity interest in AAG and an
employee of Aprio LLP.”60
• “Under Section 7(d) of the Service Agreement, Aprio is entitled to
terminate your employment immediately. . . .”61
• “On October 27, 2025, Alexeev’s employment with AAG ended.”62
Holdco’s references to Alexeev as an employee confirm that when not pursuing this
litigation, the Buyer and its affiliates viewed Alexeev as an employee.
Last, Alexeev was not involved in negotiating the Merger Agreement that led
to his post-Merger status.63 Paraphrasing Orwell, all partners are equal, but some
are more equal than others. Alexeev had a partner title but not managerial authority.
He held equity, but not the rights associated with equity partnership. He was
functionally an employee.
(ii) A Condition Of The Merger, Not Employment
The Buyer next argues that Section 925 does not apply because Alexeev
executed the Challenged Agreement as a condition of the Merger, not as a condition
of employment. That argument fails as well.
60 Compl. ¶ 7.
61 AB Ex. I at 1.
62 AB at 8.
63 See Walker Aff. ¶ 25 (“[N]egotiating the terms of a Merger Agreement with
216 partners would be completely unworkable. . . .”).
23
Whether an agreement is a condition of employment turns on whether the
employee could continue with the company without signing the agreement. In
Dalavai, for example, the United States District Court for the Southern District of
California held that an agreement was not a “condition of employment” where the
consequence for an employee of failing to sign the agreement was losing equity, not
his job.64 Similarly in Patel, the United States District Court for the Northern District
of California held that when an employee is not required to accept terms as a
condition to their initial employment or to remain employed with the employer, then
the acceptance is not a condition of employment.65
The Buyer acknowledges that if Alexeev had refused to sign the Challenged
Agreement, he would have lost his job.66 Signing the Challenged Agreement was a
condition of his employment.
(iii) Representation By Counsel
In its next attempt to escape from Section 925, the Buyer argues that Alexeev
was independently represented by counsel. That argument fails as well.
Section 925(e) provides “[t]his section shall not apply to a contract with an
employee who is in fact individually represented by legal counsel in negotiating the
64 Dalavai v. Amazon.com, Inc., 2026 WL 776364, at *3 (S.D. Cal. Mar. 19,
2026).
65 Patel v. SAP Am., Inc., 2025 WL 1810011, at *3 (N.D. Cal. July 1, 2025).
66 AB at 18 (“[A]ny partner who did not wish to participate in the Transaction
would not continue to be a Member of the Firm following closing of the Transaction.”); accord AB Alexeev Aff. ¶¶ 12, 19.
24
terms of an agreement to designate either the venue or forum in which a controversy
arising from the employment contract may be adjudicated or the choice of law to be
applied.”67 That section requires both representation and negotiation. Neither exists
here.
The first missing requirement is representation. The Buyer argues in its brief
that Russell Shaprio and Nancy Lieberman of Levenfeld Pearlstein represented the
partners and answered their questions about the transaction. 68 But Nancy
Lieberman’s affidavit puts that argument to rest. She avers that “Levenfeld
Pearlstein did not represent the individual AAG members or Aprio partners but was
retained by AAG to assist those individuals who elected to contact the firm with
questions.”69 Notably, she did not have any recollection of speaking or emailing with
Alexeev, nor did she have any documents suggesting she did.70
The other missing requirement is negotiation. Alexeev did not have the ability
to negotiate anything. The Buyer presented the Challenged Agreement as a take-itor-leave-it proposition.
Alexeev does not fall within the exclusion established by Section 925(e).
67 Cal. Lab. Code § 925(e).
68 AB at 17.
69 Lieberman Aff. ¶ 6.
70 Id. ¶ 9.
25
(iv) The Section 16601 Argument
In its last argument, the Buyer contends that Section 925 does not apply
because the Challenged Agreement was ancillary to the sale of a business. The court
need not address that issue, because it does not affect whether this court has
jurisdiction.
Section 16601 of the California Business & Professions Code authorizes
restrictive covenants in connection with the sale of a business. It states:
Any person who sells the goodwill of a business, or any owner of a
business entity selling or otherwise disposing of all of his or her
ownership interest in the business entity, or any owner of a business
entity that sells (a) all or substantially all of its operating assets together
with the goodwill of the business entity, (b) all or substantially all of the
operating assets of a division or a subsidiary of the business entity
together with the goodwill of that division or subsidiary, or (c) all of the
ownership interest of any subsidiary, may agree with the buyer to
refrain from carrying on a similar business within a specified geographic
area in which the business so sold, or that of the business entity,
division, or subsidiary has been carried on, so long as the buyer, or any
person deriving title to the goodwill or ownership interest from the
buyer, carries on a like business therein.71
Section 16601 validates restrictive covenants that meet its terms. The current
dispute, however, is not about whether the Covenants are valid. The current dispute
is about whether the Delaware Forum Provision and the Delaware Law Provision are
valid. Section 16601 does not validate those provisions.
71 Cal. Bus. & Prof. Code § 16601.
26
If this case proceeds in a forum that can exercise jurisdiction over Alexeev,
then the Buyer might attempt to rely on Section 16601 to defend the Covenants
against challenge. That issue is not currently before the court.
d. Resolving The Conflict
Because Section 925 applies, a true conflict exists between California law and
Delaware law over the validity of the Delaware Forum Provision and Delaware Law
Provision. The California statute controls.
Under the Restatement, a court faced with a true conflict must determine
whether
application of the law of the chosen state would be contrary to a
fundamental policy of a state which has a materially greater interest
than the chosen state in the determination of the particular issue and
which, under the rule of § 188, would be the state of the applicable law
in the absence of an effective choice of law by the parties.72
Although “[n]o detailed statement can be made of the situations where a
‘fundamental’ policy of the state of the otherwise applicable law will be found to
exist,”73 the Restatement provides an example that maps onto this case. According to
the Restatement, a state’s fundamental policy may exist when a statute “makes one
or more kinds of contracts illegal or which is designed to protect a person against the
oppressive use of superior bargaining power.”74
72 Restatement, supra, § 187.
73 Id. § 187 cmt. g.
74 Id.
27
So here. “Section 925 expresses California's strong public policy against forumselection clauses in employment agreements.” 75 The statue “establishes a policy
prohibiting employers from requiring California employees from agreeing to litigate
in a different forum as a prerequisite to employment.”76 As the Restatement envisions,
Section 925 is designed to protect employees against the superior bargaining power
of their employers.
The next step is to consider the weight of California’s public policy against
Delaware’s interest. In contrast to California’s strong public policy, Delaware only
has a general interest in promoting freedom of contract, and the former overrides the
latter.
[W]here it is clear that the policy of the default state is that the contract
at issue is abhorrent and void, and where, as here, the formation and
enforcement of the contract relate overwhelmingly to the default state,
a general interest in freedom of contract is unlikely to be the equal of
that public policy under the Restatement analysis. The entire purpose
of the Restatement analysis is to prevent parties from contracting
around the law of the default state by importing the law of a more
contractarian state, unless that second state also has a compelling
interest in enforcement. In other words, in every instance where the
parties seek to circumvent application of the law of the default state, the
state whose law was chosen and is asked to enforce the contract will
have the interest of protecting freedom to contract. It would be a
tautology to suggest that such an interest alone, arising in every case,
can trump the public interest of the default state, which, by definition,
has the greatest contacts with the contract at issue; otherwise, the
75 Bromlow v. D & M Carriers, LLC, 438 F. Supp. 3d 1021, 1029 (N.D. Cal.
2020).
76 Ryze Claim Sols. LLC v. Super. Ct., 33 Cal. App. 5th 1066, 1072, (2019).
28
Restatement test would be meaningless, and the default state would lose
its ability to constrain pernicious enforcement of contract rights.77
California’s materially greater interest renders the Delaware Forum Provision and
Delaware Law Provision voidable at Alexeev’s request.
2. The Provisions Do Not Support Jurisdiction.
Through his Rule 12(b)(2) motion, Alexeev has invoked his right to invalidate
the Delaware Forum Provision and Delaware Law Provisions as voidable. The Buyer
cannot rely on them to support jurisdiction.
Without the ability to rely on the Delaware Forum Provision, this court would
normally analyze whether Alexeev is otherwise subject to personal jurisdiction. In
this case, however, it is undisputed that personal jurisdiction does not otherwise
exist.
III. CONCLUSION
This court lacks personal jurisdiction over Alexeev. The case is dismissed on
that basis.
77 Ascension Ins. Hldgs., LLC v. Underwood, 2015 WL 356002, at *5 (Del. Ch.
Jan. 28, 2015).
29