On April 21, 2026, Vice Chancellor Nathan A. Cook of the Delaware Court of Chancery granted a motion to dismiss breach of fiduciary duty claims asserted by Masimo Corp. (the “Company”) against its former CEO and board chairman, enforcing a California forum selection clause in defendant’s employment agreement. Masimo Corp. v. Kiani, No. 2024-1086-NAC (Del. Ch. Apr. 21, 2026). In so holding, the Court concluded that Section 122(18) of the Delaware General Corporation Law (“DGCL”)—adopted in 2024 following West Palm Beach Firefighters' Pension Fund v. Moelis & Co., 311 A.3d 809 (Del. Ch. 2024)—permitted corporations to agree to non-Delaware forum selection provisions in stockholder agreements, even if those provisions would require the adjudication of fiduciary duty claims in a non-Delaware forum.
The dispute arose after the former CEO and board chairman resigned and sued the Company in California to obtain substantial severance payments allegedly due under his employment agreement, which contained a California forum selection clause. The Company responded by filing suit in Delaware seeking to invalidate the employment agreement as the product of alleged breaches of fiduciary duty. Defendant moved to dismiss the action, arguing that the employment agreement’s forum selection clause required the Company’s claims to be pursued in California.
In response, the Company argued that (1) its Delaware-forum bylaw superseded the employment agreement and required adjudication of the Company’s claims in Delaware, (2) as a matter of Delaware law, a contractual forum selection provision cannot encompass fiduciary duty claims related to duties that arise independently of the contract, and (3) the employment agreement was not a “stockholder agreement” under DGCL Section 122(18). The Court rejected each of the Company’s arguments.
The Court found that the forum selection provision in the employment agreement was sufficiently broad to extend to the fiduciary duty claims asserted in the Delaware action. The Court also held that, while it “may have been Delaware law once” that Delaware courts must be preserved as a forum for fiduciary duty claims, Section 122(18) contains a Section 115 “exclusion” that “legislatively overrides” this principle and permits a stockholder agreement to designate a non-Delaware forum. The Court also noted that Section 122(18)’s express provision that agreements thereunder are permissible “[n]otwithstanding [Section] 141(a)” further supported its conclusion that the legislature intended to override contrary common law. Finally, the Court rejected the Company’s argument that the employment agreement was not a “stockholder agreement” under Section 122(18), holding that the agreement qualified under the statute because defendant entered into the agreement at least in part in its capacity as the Company’s controlling stockholder.
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