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 competi