Shawn McLoughlin v. Cantor Fitzgerald L.p.

PRECEDENTIAL
UNITED STATES COURT OF APPEALS
FOR THE THIRD CIRCUIT
_________________
No. 24-3346
_________________
SHAWN MCLOUGHLIN; ROBERT MILLER; ANGELO
SOFOCLEOUS; ANDREW LEWIS; CHEYNE BUNNETT;
TOM ROBERTSHAW; OLIVIA SCOTT, as the personal
representative of the estate of Russell Scott,
Appellants
v.
CANTOR FITZGERALD L.P.; BGC HOLDINGS L.P.;
NEWMARK HOLDINGS L.P.
_________________
On Appeal from the United States District Court
for the District of Delaware
D.C. Civil No. 1:23-cv-00256
District Judge: Honorable Colm F. Connolly
_________________
Argued: September 17, 2025
Before: BIBAS, MONTGOMERY-REEVES, and AMBRO,
Circuit Judges.
(Filed: December 15, 2025)

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Blake A. Bennett
Cooch & Taylor
1000 North West Street
Suite 1500
Wilmington, DE 19801
Stephen Lagos
Alex Potter
Kyle W. Roche [ARGUED]
Freedman Normand Friedland
155 E 44th Street
Suite 915
New York, NY 10017
Counsel for Appellants Shawn McLoughlin; Robert Miller;
Angelo Sofocleous; Andrew Lewis; Cheyne Burnett; Tom
Robertshaw; and Olivia Scott, as the personal representative
of the estate of Russell Scott.
Tacy F. Flint
Sidley Austin
One S Dearborn Street
Chicago, IL 60603
Anne S. Gaza
Robert M. Vrana
Young Conaway Stargatt & Taylor
1000 N King Street
Rodney Square
Wilmington, DE 19801

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James R. Horner
Benjamin R. Nagin
Sidley Austin
787 Seventh Avenue
New York, NY 10019
David A. Paul [ARGUED]
Cantor Fitzgerald
110 E 59th Street
7th Floor
New York, NY 10022
Counsel for Appellees Cantor Fitzgerald L.P., BGC Holdings
L.P., and Newmark Holdings L.P.
_________________
OPINION OF THE COURT
_________________
MONTGOMERY-REEVES, Circuit Judge.
When a partner left the partnerships of Cantor
Fitzgerald L.P., BGC Holdings L.P., or Newmark Holdings
L.P., he was eligible to receive a sum of money at separation
and four annual payments thereafter. But those four payments
had strings attached; if the partnerships determined that a
former partner was soliciting certain parties or competing, as
broadly defined by the partnership agreements, the
partnerships could withhold any outstanding payments. They
did just that to several Former Partners,1 who, in this suit,
1 In this opinion, “Former Partners” refers to the plaintiffs-
appellants in this case.

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allege the strings were unreasonable restraints of trade that
violated Section 1 of the Sherman Act. Two of the partners
also allege that the termination of their payments violated
Delaware’s implied covenant of good faith and fair dealing.
These claims fail. As for the antitrust claims, the
Former Partners’ pecuniary injuries are not antitrust injuries
because they do not derive from anticompetitive conduct that
adversely affected the Former Partners’ status as market
participants. Nor are the Former Partners’ injuries inextricably
intertwined with an anticompetitive scheme; the partnerships
sought to profit from the Former Partners, not from reduced
competition in any labor market. As for the implied covenant
claims, the partnerships had express contractual discretion to
withhold the two Former Partners’ installment payments under
the relevant partnership agreements because those Former
Partners competed against the partnerships. So there was no
gap for the implied covenant to fill. And those Former Partners
cannot claim, on these facts, that the partnerships exercised
their discretion in bad faith. Thus, the District Court
appropriately dismissed the Former Partners’ Second
Amended Complaint (the “Complaint”), and we will affirm the
District Court’s judgment.
I. BACKGROUND2
A. The Partnership Agreements
Cantor Fitzgerald L.P. (“Cantor Fitzgerald”), BGC
Holdings L.P. (“BGC”), and Newmark Holdings L.P.
2 The following facts are taken from the Complaint and the
documents attached thereto, accepted as true, and viewed in the

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(“Newmark”) are limited partnerships governed by partnership
agreements. At all times relevant to this case, each agreement
permitted partners to receive partnership units in return for
pecuniary contributions to the partnership and for labor. At
Cantor Fitzgerald, for example, partners could purchase—
through “capital contributions” to the partnership—partnership
units called “High Distribution Units.”3 Appendix (hereinafter
“App._”) 311. They also could receive partnership units called
“Grant Units” and “Matching Grant Units” as compensation.
App. 312.
When a partner separated from one of the partnerships,
the partnership would redeem the partner’s units, including the
High Distribution Units, Grant Units, and Matching Grant
Units (or their equivalents). The departing partner would
receive an initial payout, which represented a portion of the
capital contributed by the partner to the partnership. In
exchange for the remainder of the partner’s redeemed units, the
partnership would pay the partner a defined sum of money in
four annual installments paid on each anniversary of the initial
payout. The Former Partners refer to these four installment
payments as the “Conditioned Amounts.” App. 312.
light most favorable to the Former Partners, as the plaintiffs.
See Doe v. Princeton Univ., 30 F.4th 335, 340 (3d Cir. 2022).
3 BGC’s and Newmark’s partnership agreements refer to the
same concepts in different terms. The Former Partners
attached only BGC’s and Newmark’s partnership agreements
to the Complaint but alleged that Cantor Fitzgerald’s
partnership agreement is substantially identical and pleaded
certain of its provisions.

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Payment of the Conditioned Amounts was not
guaranteed, however. A former partner could receive
Conditioned Amounts only if she refrained from “Competitive
Activity,”4 which generally included direct or indirect
4 Under the partnership agreements, Competitive Activity
occurs when a former partner:
(A) directly or indirectly, or by action in concert
with others, solicits, induces, or influences, or
attempts to solicit, induce or influence, any other
partner, employee or consultant of any member
of [Cantor Fitzgerald], [BGC] or [Newmark] or
any other Affiliated Entity to terminate their
employment or other business arrangements with
any member of [Cantor Fitzgerald], [BGC] or
[Newmark] or any other Affiliated Entity, or to
engage in any Competing Business, or hires,
employs, engages (including as a consultant or
partner) or otherwise enters into a Competing
Business with any such Person[;]
(B) solicits any of the customers of any member
of [Cantor Fitzgerald], [BGC] or [Newmark] or
any other Affiliated Entity (or any of their
employees or service providers), induces such
customers or their employees or service
providers to reduce their volume of business
with, terminate their relationship with or
otherwise adversely affect their relationship with
any member of [Cantor Fitzgerald], [BGC] or
[Newmark] or any other Affiliated Entity;

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solicitation of other partners, employees, consultants, or
customers; efforts to adversely affect any of the partnerships’
customer relationships; or engaging in “Competing Business.”5
App. 313–14.
(C) does business with any person who was a
customer of any member of [Cantor Fitzgerald],
[BGC] or [Newmark] or any other Affiliated
Entity during the twelve (12)-month period prior
to such a Partner becoming a Terminated or
Bankrupt Partner if such business would
constitute a Competing Business;
(D) directly or indirectly engages in, represents
in any way, or is connected with, any Competing
Business, directly competing with the business
of any member of [Cantor Fitzgerald], [BGC] or
[Newmark] or any other Affiliated Entity,
whether such engagement shall be as an officer,
director, owner, employee, partner, consultant,
affiliate or other participant in any Competing
Business; or
(E) assists others in engaging in any Competing
Business in the manner described in the
foregoing clause (D).
App. 313–14.
5 Competing Business includes activity that:
(1) involves the development and operations of
electronic trading systems,

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Put differently, refraining from Competitive Activity was a
condition precedent to payment of the Conditioned Amounts—
a mechanism the Former Partners call the “Conditioned
Payment Device.” App. 317; see also Cantor Fitzgerald, L.P.
v. Ainslie (Cantor II), 312 A.3d 674, 685–86 (Del. 2024)
(2) involves the conduct of the wholesale or
institutional brokerage business,
(3) consists of marketing, manipulating or
distributing financial price information of a type
supplied by any member of [Cantor Fitzgerald],
[BGC] or [Newmark] or any other Affiliated
Entity to information distribution
services or
(4) competes with any other business conducted
by any member of [Cantor Fitzgerald], [BGC] or
[Newmark] or any other Affiliated Entity if such
business was first engaged in by any member of
[Cantor Fitzgerald], [BGC] or [Newmark] or any
other Affiliated Entity, or any member of
[Cantor Fitzgerald], [BGC] or [Newmark] or any
other Affiliated Entity took substantial steps in
anticipation of commencing such business and
prior to the date on which such
Founding/Working Partner or REU Partner, as
the case may be, ceases to be a
Founding/Working Partner or REU Partner, as
the case may be.
App. 315–16.

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(describing identical provisions as conditions precedent). So
for all four years, as long as any installment payment remained
unpaid, a former partner risked forfeiting her remaining
payments by engaging in Competitive Activity. And the
partnership agreements gave the General Partner of each
partnership—in each case an entity allegedly controlled by
nonparty Howard Lutnick—“sole and absolute discretion” to
determine, “in good faith,” whether a former partner had
engaged in Competitive Activity. App. 74. That determination
would “be final and binding.” Id.
That was not the only restraint on a former partner’s
ability to engage in Competitive Activity. For one to two years
after her separation, a former partner was bound by covenant
not to engage in Competitive Activity, or even to do anything
that “could be considered . . . of th[at] nature.”6 App. 73, 317.
The Former Partners call this the “Restrictive Covenant
Device,”7 App. 313, and the General Partner retained identical
discretion to determine whether to use it. Thus, for the first
one to two years when Conditioned Amounts were
outstanding, former partners were barred from Competitive
Activity by covenant and discouraged by the Conditioned
Payment Device. For the latter two years, they were only
discouraged. Although all former partners were subject to the
Restrictive Covenant Device, none of the Former Partners in
6 Partners were bound not to engage in the conduct described
in subsection (A) of the Competitive Activity definition for one
year following their separation, and all other defined conduct
for two years.
7 We refer to the Restrictive Covenant Device and Conditioned
Payment Device jointly as the “Devices.”

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this action allege that Cantor Fitzgerald, BGC, and/or
Newmark enforced that Device against them.
B. The Partnerships Exercise the Conditioned
Payment Device
Four partners—Andrew Lewis, Cheyne Burnett, Tom
Robertshaw, and Russell Scott8—separated from one or more
of Cantor Fitzgerald, BGC, or Newmark and were denied
Conditioned Amounts by operation of the Conditioned
Payment Device. Lewis, Burnett, Robertshaw, and Scott do
not plead or argue that they refrained from Competitive
Activity.
The three remaining Former Partners—Shawn
McLoughlin, Robert Miller, and Angelo Sofocleous—signed
separation agreements memorializing their Conditioned
Amounts owed and other terms of their separation from Cantor
Fitzgerald, BGC, and/or Newmark.9 McLoughlin’s and
Miller’s agreements incorporated the partnership agreements’
Devices. Sofocleous’s separation agreement contained its own
nonsolicit and noncompete provisions, but did not “waive[] or
modif[y] . . . any provisions of [Cantor Fitzgerald’s]
[p]artnership [a]greement.” App. 556.
BGC and Cantor Fitzgerald invoked the Conditioned
Payment Device against McLoughlin, Miller, and Sofocleous,
8 Because Mr. Scott is deceased, Olivia Scott is named as a
plaintiff as a representative of Mr. Scott’s estate.
9 Unlike the other Former Partners, McLoughlin received his
Conditioned Amounts over three years, instead of the standard
four, under his separation agreement.

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who also do not dispute that they engaged in Competitive
Activity. McLoughlin and Sofocleous, however, plead
additional context for those invocations.
In McLoughlin’s case, BGC’s president, Shaun Lynn,
“repeatedly” represented that Lutnick “would allow
[McLoughlin] to keep his partnership units so long as he did
not go to one of BGC’s large competitors.” App. 353.
“Relying on those representations,” McLoughlin “sat out of
employment a full year” and chose instead to consult for an
outfit called LPS Partners. Id. “McLoughlin stayed in touch
with Lutnick for more than a year after he left BGC and offered
to help [Lutnick] hire employees that Lutnick wanted to
terminate.” App. 354. But “[s]hortly after” McLoughlin began
working, Lutnick “accused him,” without evidence, “of
attempting to recruit another BGC partner.” Id. Despite
McLoughlin telling Lutnick the accusation was false, “BGC
triggered the Conditioned Payment Device” and denied
McLoughlin his Conditioned Amounts. Id.
Sofocleous also took a year of leave and then
“repeatedly sought out advice from” Cantor Fitzgerald “on
whether or not he could join” a London-based financial-
services company called Marex. App. 354. Because Cantor
Fitzgerald had “abandoned” the industry in which Marex
operated, Sofocleous believed he could work for Marex
without triggering the Conditioned Payment Device. Id.
Cantor Fitzgerald, however, did not respond to Sofocleous’s
queries. Sofocleous joined Marex anyway. “Shortly
thereafter,” Cantor Fitzgerald invoked the Conditioned
Payment Device. Id.

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C. This Litigation
After the Delaware Court of Chancery held in a similar
case that the Devices were unenforceable under Delaware law,
see Ainslie v. Cantor Fitzgerald, L.P. (Cantor I), 2023 WL
106924, at *26 (Del. Ch. Jan. 4, 2023), the Former Partners
initiated this action. When the Delaware Supreme Court
reversed, see Cantor II, 312 A.3d at 692–93, the Former
Partners amended their complaint.
The operative Complaint contains four claims. The
primary claim is that enforcement of the Devices violates
Section 1 of the Sherman Act (15 U.S.C. § 1) by depressing
wages, constraining supply, stifling innovation, and raising
costs for firms in two principal national labor markets: the
“Middle Market Investment Bank Labor Market” and
“Interdealer Broker . . . Labor Market.”10 App. 326. The
Former Partners allege their “pecuniary injur[ies]” were “direct
and proximate result[s] of [the partnerships’] anticompetitive
conduct.” App. 359. The Former Partners then assert two
claims related to their Sherman Act claim: breach of contract
(for which the Former Partners seek payment of their
remaining Conditioned Amounts) and a claim for a declaratory
judgment that the Devices are unenforceable.11 Finally,
10 The Former Partners allege that the Middle Market
Investment Bank Labor Market includes “two submarkets: (1)
the Equity Capital Labor Submarket and (2) the Trader Labor
Submarket.” App. 326.
11 The Former Partners assert these first three claims on behalf
of themselves and a putative class of Former Partners who were
denied Conditioned Amounts.

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McLoughlin and Sofocleous allege the partnerships violated
Delaware’s implied covenant of good faith and fair dealing by
withholding Conditioned Amounts in bad faith.
The District Court granted the partnerships’ motion to
dismiss, holding that (1) the Former Partners had failed to
plead an “antitrust injury,” App. 6, which is necessary to assert
an antitrust claim under the Sherman Act; and (2) the Former
Partners failed to show the “subjective bad faith” required to
breach the implied covenant “in the context of a partnership
agreement” under Delaware law. App. 12. The Former
Partners appealed.
II. JURISDICTION AND STANDARD OF REVIEW
The District Court had jurisdiction under 28 U.S.C.
§§ 1331, 1332(d)(2), and 1337. We have jurisdiction under 28
U.S.C. § 1291.
Our review of the District Court’s adjudication of a
motion to dismiss is de novo. Kalu v. Spaulding, 113 F.4th
311, 324 (3d Cir. 2024). “We accept as true the factual
allegations in the complaint, and draw all reasonable inferences
in the plaintiff[s’] favor.” Phila. Taxi Ass’n, Inc v. Uber
Techs., Inc., 886 F.3d 332, 338 (3d Cir. 2018).
III. DISCUSSION
To resolve this appeal, we must answer two questions:
first, whether the Former Partners’ losses amounted to the
“antitrust injury” required for a Sherman Act claim; and
second, whether the implied-covenant claim is plausible. Like
the District Court, we answer both questions in the negative.

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A. Antitrust Injury
Section 4 of the Clayton Act supplies a cause of action
to “any person who shall be injured in his business or property
by reason of anything forbidden in the antitrust laws,” 15
U.S.C. § 15(a), including violations of the Sherman Act. See
Cromar Co. v. Nuclear Materials & Equip. Corp., 543 F.2d
501, 505 (3d Cir. 1976) (noting that Congress created Section
4 of the Clayton Act “[t]o ensure enforcement of the antitrust
laws”). Despite that “extraordinarily broad language,”
Hanover 3201 Realty, LLC v. Vill. Supermarkets, Inc., 806
F.3d 162, 171 (3d Cir. 2015), “not every person may sue” for
violations of the Sherman Act, Host Int’l, Inc. v. MarketPlace,
PHL, LLC, 32 F.4th 242, 248 (3d Cir. 2022). “[E]ven when
there is a clear violation of the antitrust laws, § 4 allows only a
‘proper plaintiff’ to bring a private suit to remedy that
violation.” Hanover, 806 F.3d at 171 (quoting Assoc. Gen.
Contractors of Cal., Inc. v. Cal. State Council of Carpenters,
459 U.S. 519, 544 (1983)).
A plaintiff is proper only if she has “antitrust standing,
which is a threshold requirement in any antitrust case.” Phila.
Taxi, 886 F.3d at 343. Although the name “echoes the familiar
formulation of Article III,” Host, 32 F.4th at 249, antitrust
standing is a “prudential limitation[]” that “does not affect the
subject matter jurisdiction of the court, as Article III standing
does.” Ethypharm S.A. Fr. v. Abbott Lab’ys, 707 F.3d 223, 232
(3d Cir. 2013). The existence of antitrust standing turns on a
five-factor test, but one factor—antitrust injury—is dispositive

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here.12 “[A]ntitrust injury is ‘a necessary but insufficient
condition’” for antitrust standing, Phila. Taxi, 886 F.3d at 343
(quoting Barton & Pittinos, Inc. v. SmithKline Beecham Corp.,
118 F.3d 178, 182 (3d Cir. 1997)), so “the absence of antitrust
injury[] is enough to affirm the District Court’s judgment” that
the Former Partners’ Sherman Act claim should be dismissed.
Host, 32 F.4th at 249.
An antitrust injury is an “injury of the type the antitrust
laws were intended to prevent and that flows from that which
makes defendants’ acts unlawful.” Brunswick Corp. v. Pueblo
Bowl-O-Mat, Inc., 429 U.S. 477, 489 (1977). “[T]he antitrust
laws were designed to protect [against] market-wide
anticompetitive activities,” Eichorn v. AT & T Corp., 248 F.3d
131, 140 (3d Cir. 2001), not to protect “individual
competitors.” Lifewatch Servs. Inc. v. Highmark Inc., 902 F.3d
12 The four other factors are:
(1) [a] causal connection between the antitrust
violation and the harm to the plaintiff and the
intent by the defendant to cause that harm, with
neither factor alone conferring standing . . . [2]
the directness of the injury, which addresses the
concerns that liberal application of standing
principles might produce speculative claims; [3]
the existence of more direct victims of the
alleged antitrust violations; and [4] the potential
for duplicative recovery or complex
apportionment of damages.
Phila. Taxi, 886 F.3d at 343 n.8 (internal quotation marks
omitted).

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323, 342 (3d Cir. 2018). Thus, to demonstrate an injury of the
type the antitrust laws were intended to prevent, “an individual
plaintiff personally aggrieved by an alleged anti-competitive
agreement” must plead and prove that “the activity has a wider
impact on the competitive market.” Eichorn, 248 F.3d at 140;
see also, e.g., Race Tires Am., Inc. v. Hoosier Racing Tire
Corp., 614 F.3d 57, 83 (3d Cir. 2010) (“To establish antitrust
injury, a plaintiff must show harm to competition . . . .”). We
have explained that, although an antitrust plaintiff must allege
that she was injured in some way, she must also allege that “the
‘challenged conduct affected the prices, quantity or quality of
goods or services, not just [her] own welfare.’” Host, 32 F.4th
at 250 (alterations omitted) (quoting Mathews v. Lancaster
Gen. Hosp., 87 F.3d 624, 641 (3d Cir. 1996)). Our requirement
that a plaintiff’s injury derives from effects on price, quality,
or quantity ensures that “[a]ntitrust injury does not arise . . .
until a private party is adversely affected by
an anticompetitive aspect of the defendant’s conduct.” Atl.
Richfield Co. v. USA Petrol. Co., 495 U.S. 328, 339 (1990)
(citing Brunswick, 429 U.S. at 487).
“Generally,” plaintiffs who satisfy that requirement are
“consumers and competitors in the restrained market and . . .
those whose injuries are the means by which the defendants
seek to achieve their anticompetitive ends.” Ethypharm, 707
F.3d at 233 (quoting W. Penn Allegheny Health Sys., Inc. v.
UPMC, 627 F.3d 85, 102 (3d Cir. 2010)). A plaintiff in the
latter category must have an injury that is “inextricably
intertwined” with the defendant’s anticompetitive scheme, id.
at 237 (internal quotation marks omitted), meaning there is a
“significant causal connection” between her injury and an
“antitrust conspiracy” that the defendant orchestrated with
broader anticompetitive aims. Gulfstream III Assocs., Inc. v.

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Gulfstream Aerospace Corp., 995 F.2d 425, 429 (3d Cir. 1993)
(quoting Int’l Raw Materials, Ltd. v. Stauffer Chem. Co., 978
F.2d 1318, 1328 (3d Cir. 1992)); see W. Penn Allegheny, 627
F.3d at 102 (noting that the defendant must have had
“anticompetitive ends”); Blue Shield of Va. v. McCready, 457
U.S. 465, 479 (1982) (finding antitrust injury where the
plaintiff’s injury was “the very means by which” the defendant
allegedly “sought to achieve its illegal ends”).
The Former Partners argue they have adequately
pleaded competitive harm deriving from their status as market
participants. They also argue that their injuries are inextricably
intertwined with an anticompetitive scheme. As explained
below, neither argument convinces.13
1. Harm to Competition
The Former Partners allege competitive harm in two
principal ways. First, they claim the Devices depressed wages,
reduced the labor supply, and increased hiring costs for
workers and firms in the Middle Market Investment Bank and
Interdealer Broker Labor Markets, while stifling innovation
more generally. Second, the Former Partners cite academic,
administrative, and judicial authority for the proposition that
noncompetes “can restrain labor markets and produce
anticompetitive effects,” Opening Br. 40. Both arguments fail.
13 Because these conclusions are dispositive of the Former
Partners’ Sherman Act claim and related claims, we do not
address the parties’ alternative arguments about market
definition, timeliness, the existence of concerted action, and
the rule of reason.

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As to the first argument, we reiterate that the Former
Partners must plausibly plead “‘that [their] loss comes from
acts that reduce output or raise prices to consumers’ in the
relevant market.” Host, 32 F.4th at 252 (quoting Chi. Pro.
Sports Ltd. P’ship v. Nat’l Basketball Ass’n, 961 F.2d 667, 670
(7th Cir. 1992)). And they “‘must make some
showing of actual injury attributable to something the antitrust
laws were designed to prevent,’ not potential injury.” Id. at
251–52 (quoting J. Truett Payne Co. v. Chrysler Motors Corp.,
451 U.S. 557–58 (1981)); see also Phillip E. Areeda & Herbert
Hovenkamp, Antitrust Law: An Analysis of Antitrust Principles
and Their Application ¶ 337c (4th & 5th eds., 2025)
[hereinafter “Areeda & Hovenkamp”] (“No matter how clear
the violation, the private plaintiff must still prove that it was
actually injured by the thing that makes the conduct unlawful
under the antitrust laws.”). The Former Partners’ claims are too
general and internally inconsistent for us to infer that their
single concrete loss—the withholding of their unpaid
Conditioned Amounts—derives from conduct that harmed
competition.
The Complaint pleads generally that the Devices
“disrupt[ed] the proper function of the wage-setting
mechanism of a free labor market,” restricting supply and
increasing hiring costs. App. 349. The Former Partners
explain that “[b]ecause [Cantor Fitzgerald’s] and BGC’s
highest performing professionals are often owed millions of
dollars in Conditioned [Amounts], the Conditioned Payment
Device and the [s]eparation [a]greements operate to make it
cost prohibitive” for other firms “to hire [Cantor Fitzgerald’s]
and BGC’s best talent.” App. 350. Although we normally
credit a plaintiff’s allegations when evaluating a motion to
dismiss, the Former Partners’ allegations on this score are at

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odds with their own pleaded experiences. The Former Partners
all found new employment, so it could not have been cost-
prohibitive to hire former partners who were burdened by the
Devices.14 Without at least some additional support, the
Former Partners’ generic allegations do not make plausible that
relevant labor markets were distorted, let alone that such
distortions flowed through to them.
The Former Partners allege other injuries that sound like
they derive from harm to competition, but are unsubstantiated
by, or conflict with, the rest of their allegations. For example,
the Former Partners claim the Devices “caus[ed]” them to
receive “lower wages and compensation,” but do not explain
why the Devices would affect the wage a third-party
employer—unrestrained by the Devices—would pay. App.
349. The Former Partners also allege the Devices “artificially
restrict[ed] the supply of professionals available to other firms”
in the pleaded labor markets. Id. Evidently not; all the Former
Partners found work. The Former Partners claim the Devices
14 The Former Partners argue that their decision to compete
despite an anticompetitive restraint should not defeat antitrust
standing. We agree that mere persistence in the face of
anticompetitive adversity might not, on its own, preclude
antitrust injury. Cf. McCready, 467 U.S. at 468 (finding
antitrust injury where the plaintiff purchased psychotherapy
services despite the defendant-insurer’s reimbursement
restriction). But the point is that the Former Partners
undermine their claim of harm to competition by alleging that
they “had the clear opportunity to compete and did compete,
sometimes successfully,” Race Tires Am., 614 F.3d at 84,
without articulating how their competition was impaired by
any market distortion.

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“increas[e] the cost to [those] other firms,” presumably to
locate and hire talent. Id. But the Former Partners do not
allege how they were hurt by any such cost increases and thus
why the increases caused them, rather than the other firms,
antitrust injury. Finally, the Former Partners claim the Devices
“deterred” them from seeking jobs after their departures. App.
335. Again, that is inconsistent with the rest of the partners’
allegations because they all obtained jobs. And in any event,
the Former Partners fail to adequately allege that the deterrence
flowed from any adverse change in the market for their
services, rather than from a desire to avoid forfeiting a
“contingent post-withdrawal financial benefit[ ].” Cantor II,
312 A.3d at 692 (describing the Conditioned Amounts).
The one concrete injury the Former Partners
consistently allege—the loss of their Conditioned Amounts—
does not “reflect the anticompetitive effect either of [a]
violation [of the Sherman Act] or of anticompetitive acts made
possible by [a] violation.” Brunswick, 429 U.S. at 489.15 The
15 The Former Partners resist any reliance on Brunswick
because, in their view, their “damages do not stem from [an]
inability to extract greater profits from a less competitive
market.” Opening Br. 30 (emphasis omitted). We agree that
Brunswick is a somewhat awkward fit for this case. The
plaintiffs in Brunswick complained essentially about a
procompetitive effect of the defendant’s allegedly
monopolistic market power; the Former Partners do not
similarly allege that the Devices “preserved competition.”
Brunswick, 429 U.S. at 488. But the fact that the Former
Partners are not complaining about a procompetitive effect of
the Devices does not mean they are complaining about an
anticompetitive effect. Conduct may also be “neutral as to

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partnerships withheld the Conditioned Amounts because the
Former Partners engaged in Competitive Activity. The
withholding did not stem from or reflect “a negative impact on
consumers or to competition in general.”16 Phila. Taxi, 886
F.3d at 344. Said differently, the Former Partners have not
alleged how the Devices made life more difficult for them as
participants in the relevant labor markets, and how, without the
Devices, their experiences as market participants would have
been better. Thus, the Former Partners have not alleged a
“causal link” between harm to labor-market competition and
the one concrete injury for which they seek redress—the
withholding of their Conditioned Amounts. Id. at 343.
The Former Partners’ second competition-related
argument, about the potential anticompetitive effects of
noncompetes or “forfeiture-for-competition clauses,” fails for
similar reasons. Opening Br. 42. Even if such provisions
negatively affect “earnings,” “job quality,” “business
formation and innovation,” or other byproducts of competition
in general, id. at 41–42 (citation omitted), the Former Partners
must plausibly allege how the Devices, in particular, caused
“actual injury attributable to something the antitrust laws were
competition,” and in any event antitrust injury is possible only
for a “loss stem[ming] from a competition-reducing aspect or
effect of the defendant’s behavior.” Atl. Richfield, 495 U.S. at
344. As explained, the Former Partners have not alleged such
a loss.
16 Indeed, to the extent the Devices made the Former Partners
less likely to find new work for a Competing Business, they
increased the likelihood that the Former Partners would retain
their Conditioned Amounts.

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designed to prevent.” Host, 32 F.4th at 252 (quoting J. Truett
Payne, 451 U.S. at 558); see also Areeda & Hovenkamp
¶ 337c. The Former Partners fail to allege that the Devices
caused the posited effects in relevant markets, that those effects
befell them, or that the effects relate to their loss of
Conditioned Amounts. When pleading antitrust injury,
“potential harms do not suffice.” Host, 32 F.4th at 251 n.8
(rejecting reliance on anecdotal evidence and market study
insufficiently tied to conduct at issue). So the Former Partners’
generalized claims about the deleterious effects of forfeiture-
for-competition clauses and covenants not to compete do not
show antitrust injury.
The Former Partners cite the Federal Trade
Commission’s (the “FTC”) recent attempt to ban noncompetes
as evidence that such agreements, and by extension the
Devices, “can restrain labor markets and produce
anticompetitive effects.” Opening Br. 40. When it proposed
that ban, the FTC located seventeen antitrust cases involving
those covenants, of which fifteen were unsuccessful. Non-
Compete Clause Rule, 88 Fed. Reg. 3482, 3496 (Jan. 19, 2023)
(codified at 16 C.F.R. pt. 910).17 “[I]n the vast majority of
these [fifteen] cases, the party challenging the non-compete
clause did not allege the non-compete clause adversely
affected competition.” Id.
One recent decision, cited by the FTC and the Former
Partners, found antitrust standing where the plaintiff alleged
“the existence of unenforceable non-compete clauses, sham
17 Although formally codified, the FTC’s final rule was held
unlawful and set aside by Ryan, LLC v. FTC, 746 F. Supp. 3d
369 (N.D. Tex. 2024).

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23
litigation, and threats of legal action against doctors” to
manipulate the market for concierge medical services.
Signature MD, Inc. v. MDVIP, Inc., 2015 WL 3988959, at *8
(C.D. Cal. Apr. 21, 2015). There, though, the plaintiff alleged
harm stemming from the anticompetitive effects of the non-
compete clauses: It “ha[d] not been able to enter large, affluent,
urban” markets to sell its services. Id. at *9. That type of
allegation is missing here.18
2. Injury Inextricably Intertwined with
an Anticompetitive Scheme
Next, the Former Partners claim that their loss of
Conditioned Amounts was inextricably intertwined with the
partnerships’ decision to wield the Devices in a scheme for
“anticompetitive ends.” Opening Br. 32 (quoting Hanover,
806 F.3d at 172). We find that argument unpersuasive.
The Supreme Court first articulated the “inextricably
intertwined” theory of antitrust injury in McCready. The
plaintiff in McCready alleged that a medical insurer conspired
with a group of psychiatrists to deny reimbursements for
patients who visited clinical psychologists “unless the
treatment was supervised by and billed through a physician.”
457 U.S. at 468–70. The plaintiff was not a psychologist but a
patient who visited a psychologist and was then denied
reimbursement. Id. at 468. The Supreme Court rejected the
argument that only the psychologists could suffer antitrust
injury. Id. at 478. The plaintiff’s harm—denial of
18 We do not endorse or condemn the district court’s analytic
approach in Signature MD; we note only that the case is
distinguishable on its facts.

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reimbursement—“was the very means by which” the insurer
“sought to achieve its illegal ends,” and the denial of
reimbursement “was a necessary step in effecting the ends of
the alleged illegal conspiracy.” Id. at 479. So “[a]lthough [the
plaintiff] was not a competitor of the conspirators, the injury
she suffered was inextricably intertwined with the injury the
conspirators sought to inflict on psychologists and the
psychotherapy market.” Id. at 483–84.
Consistent with McCready’s focus on a defendant’s
objectives, our decisions applying the “inextricably
intertwined” exception have, like McCready, focused on the
defendants’ use of the plaintiff as a “means” toward broader
“anticompetitive ends.” Lifewatch, 902 F.3d at 342. In
Lifewatch, for example, health insurers concertedly refused to
cover a certain kind of outpatient cardiac monitor. Id. at 331–
34. The insurers’ ends were anticompetitive: self-enrichment
“by shifting demand to less expensive treatment options.” Id.
at 335 n.7. The plaintiff—a supplier of the cardiac monitors,
not a competitor or consumer of the insurers—could therefore
characterize its “lost profits from depressed . . . sales” as an
antitrust injury. Id. at 342. Said otherwise, the insurers sought
to profit not at the plaintiffs’ expense, but at the expense of
competition in the outpatient cardiac monitor market, and the
supplier’s injury was inextricably intertwined with that
scheme. The same pattern occurred in Hanover, where a
grocer bombarded a grocery-store landlord with lawsuits and
administrative gamesmanship to keep a rival grocer out of the
local grocery market. 806 F.3d at 167–70. The defendant-
grocer’s “end goal . . . was to injure” its competitor and thereby
profit from reduced competition. Id. at 174. In these cases, as
in McCready, the defendants were charged “with a

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purposefully anticompetitive scheme.” McCready, 457 U.S. at
483.
Such allegations are absent here. The Former Partners
argue the partnerships used the Devices “to harm [the
partnerships’] competitors”—other financial-services firms—
by keeping the Former Partners away from them. Opening Br.
33. But the Complaint does not describe such a scheme. In
fact, the Former Partners allege the partnerships had another
motivation: prizing money from former partners.
The Complaint makes that claim three times. First, the
Former Partners allege the partnerships used the Conditioned
Payment Device “to effectuate a scheme . . . to enrich
themselves at the expense of their former employees,” App.
306 (emphasis added), not at the expense of competition. The
Complaint repeats the allegation, claiming the Conditioned
Payment Device was a tool for the partnerships “to enrich
themselves at the expense of those who are either terminated
or who voluntarily leave the partnerships.” App. 319
(emphasis added). Consistent with that motive, the
partnerships offered separation agreements to departing
partners with the “intention” of duping those partners into
forfeiting their Conditioned Amounts—not undermining other
firms seeking financial-services talent. App. 320.
These allegations do not describe a scheme “premised
on restraining the employment market,” Areeda & Hovenkamp
¶ 377a (rev. ed. 1995), which would be consistent with
“anticompetitive intent,” Angelico v. Lehigh Valley Hosp., Inc.,
184 F.3d 268, 275 (3rd Cir. 1999). Rather, the claim is that the
partnerships attempted to harm the Former Partners by

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effectively transferring money from their pockets to the
partnerships’.19
The Complaint plausibly pleads that the partnerships
used adhesion contracts to recoup the Former Partners’ earned
compensation and impound money the Former Partners had
contributed to the partnerships. Those objectives might be
unsavory, but they are not anticompetitive. The Former
Partners fail to plausibly allege how taking money from them
affects competition for financial-services talent or evinces an
attempt to gain an anticompetitive advantage over competitors
by “affect[ing] the prices, quantity[,] or quality” of labor. Host,
32 F.4th at 250. The Former Partners thus cannot invoke the
“inextricably intertwined” exception and fail to show antitrust
injury. Without a plausible allegation of antitrust injury, the
Former Partners cannot state a Sherman Act claim. See Phila.
Taxi, 886 F.3d at 343. We therefore conclude that the District
Court properly dismissed Count I of the Complaint. And
19 To be sure, the Former Partners at times gesture toward an
anticompetitive purpose; they allege, for example, that the
partnership agreements containing the Devices “have no
purpose except stifling competition.” App. 328. But because
the Former Partners allege specifically and repeatedly that the
partnerships used the Devices to requisition the Former
Partners’ money, the Former Partners’ “bald” and
“conclusory” allegations about the Devices’ purpose are “not
entitled to be assumed true.” Ashcroft v. Iqbal, 556 U.S. 662,
681 (2009); see also Finkelman v. Nat’l Football League, 810
F.3d 187, 202 (3d Cir. 2016) (“[E]ven at the pleading stage,
‘we need not accept as true unsupported conclusions and
unwarranted inferences.’” (quoting Maio v. Aetna, Inc., 221
F.3d 472, 500 (3d Cir.2000))).

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because Counts II and III depend on Count I for their success,
the District Court properly dismissed those claims, as well.
B. Implied Covenant of Good Faith and Fair
Dealing
We turn now to McLoughlin’s and Sofocleous’s claims
that the manner of the partnerships’ enforcement of the
Conditioned Payment Device against them violated the implied
covenant of good faith and fair dealing under Delaware law.
We conclude that neither claim is viable.
In Delaware, the implied covenant of good faith and fair
dealing “is inherent in all contracts and is used to infer contract
terms ‘to handle developments or contractual gaps that the
asserting party pleads neither party anticipated.’” Dieckman v.
Regency GP LP, 155 A.3d 358, 367 (Del. 2017) (quoting
Nemec v. Shrader, 991 A.2d 1120, 1125 (Del. 2010)). Because
the covenant is a gap-filling device, it “impl[ies] only those
terms that the parties would have agreed to during their original
negotiations if they had thought to address them”; it cannot
rewrite express terms. Gerber v. Enter. Prods. Holdings, LLC,
67 A.3d 400, 418 (Del. 2013), overruled in part on other
grounds by Winshall v. Viacom Int’l, Inc., 76 A.3d 808 (Del.
2013). Thus, a court confronting an implied-covenant claim
must “determine[] whether the language of the contract
expressly covers a particular issue, in which case the implied
covenant will not apply, or whether the contract is silent on the
subject, revealing a gap that the implied covenant might fill.”
NAMA Holdings, LLC v. Related WMC LLC, 2014 WL
6436647, at *16 (Del. Ch. Nov. 17, 2014). If a “contract is
‘truly silent’ about [an] issue, and the express terms of the . . .
agreement naturally imply certain corresponding conditions,”
the contract’s “terms [are] enforced according to the

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reasonable expectations of the parties at the time of
contracting.” Baldwin v. New Wood Res., LLC, 283 A.3d 1099,
1117 (Del. 2022) (quoting Dieckman, 155 A.3d at 361).
Although contract language reigns supreme in the
implied-covenant context, a party with sole discretion to act
may not act without restraint. The implied covenant still
prevents the party from wielding its discretion “arbitrarily or
unreasonably [to] frustrat[e] the fruits of the bargain that the
asserting party reasonably expected.” Id. at 1118 (quoting
Dieckman, 155 A.3d at 367); Winshall, 76 A.3d at 816
(“[W]hen a contract confers discretion on one party, the
implied covenant of good faith and fair dealing requires that
the discretion . . . be used reasonably and in good faith.”).20
Because, on the facts pled, the relevant agreements
expressly permitted the termination of McLoughlin’s and
Sofocleous’s Conditioned Amounts, their implied-covenant
claims fail.21 Start with McLoughlin. He alleges that Lynn,
20 The Former Partners argue that an implied-covenant plaintiff
need only claim that a defendant “did not reasonably believe
that it was acting in the best interests of the [p]artnership.”
Opening Br. 56 (quoting Brinckerhoff v. Enbridge Energy Co.,
159 A.3d 242 (Del. 2017)) (cleaned up). The Former Partners’
reliance on Brinckerhoff is mistaken. That case addressed a
contractual good-faith provision, not the implied covenant, and
derived its “reasonably believe” standard from language in the
relevant contract. See Brinckerhoff, 159 A.3d at 260 & n.62.
Brinckerhoff’s interpretation of a contract does not control our
application of the implied covenant.
21 McLoughlin alleges he was denied Conditioned Amounts
“owed to . . . [him] under Section 2” of his separation

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29
BGC’s president, repeatedly “told” him that he could accept
most forms of alternate employment and that he “[relied] on
those representations” when deciding to consult for LPS
Partners. App. 353. But McLoughlin does not dispute that
Lynn’s representations and his subsequent conduct do not
square with the BGC partnership agreement’s definition of
Competitive Activity. And that agreement provides that the
definition of Competitive Activity cannot be changed “except
as otherwise agreed to in writing by the General Partner.” App.
73 (emphasis added). Because McLoughlin did not obtain
Lynn’s representations in writing from the General Partner,
and the partnership agreement predetermined that oral
representations would be ineffective, there was no gap to fill,
and McLoughlin cannot complain that withholding his
Conditioned Amounts despite Lynn’s promises breached the
implied covenant.
McLoughlin also alleges that, before BGC “trigger[ed]
the Conditioned Payment Device,” Lutnick, who controlled
agreement. App. 322. That section lists the amounts owed to
McLoughlin and generally obligates BGC to pay those
amounts. Thus, BGC owed the Conditioned Amounts to
McLaughlin under the separation agreement. The denial of
those amounts, however, occurred because of the Conditioned
Payment Device in the partnership agreement. As Section 2(f)
of McLoughlin’s separation agreement makes clear, “all of
[his] rights and obligations [t]hereunder are subject to the terms
and conditions of . . . the BGC[] Partnership Agreement.” App.
526. Unlike McLoughlin, Sofocleous alleges he was denied
Conditioned Amounts “pursuant to the Conditioned Payment
Device contained in [his separation] agreement,” App. 322,
which we discuss below.

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BGC’s General Partner, accused him falsely and without
evidence of “attempting to recruit another BGC partner.” App.
354. Because the implied covenant (and BGC’s partnership
agreement) required BGC’s General Partner to determine in
“good faith” whether McLoughlin engaged in Competitive
Activity, Baldwin, 283 A.3d at 1116 (internal quotation marks
omitted); App. 74, McLoughlin’s claim is stronger here;
invoking the Conditioned Payment Device without evidence
might constitute the “arbitrar[y] or unreasonabl[e]” conduct the
implied covenant prohibits. Nemec, 991 A.2d at 1126; see
Dieckman, 155 A.3d at 368 (finding a general partner could not
“use false or misleading statements” to trigger safe harbor
provisions).
But Lutnick’s accusation of solicitation cannot sustain
an implied-covenant claim because McLoughlin already had
engaged in Competitive Activity, as he admits, by consulting
for LPS Partners. See App. 354 (alleging that Lutnick accused
McLoughlin of solicitation only “after McLoughlin started
working again”). That gave BGC an adequate and independent
reason to withhold McLoughlin’s Conditioned Amounts in
good faith, under the partnership agreement’s express terms.
Thus, McLoughlin cannot plausibly claim that Lutnick’s
allegedly evidence-free accusation “frustrat[ed] the fruits of
the bargain that [he] reasonably expected,” Baldwin, 283 A.3d
at 1118; he already had failed to satisfy the noncompetition
condition precedent to his receipt of Conditioned Amounts.22
22 We might reach a different conclusion if McLoughlin had
alleged that BGC withheld his Conditioned Amounts only
because of his purported solicitation, and not because of his
competition. But the Complaint does not make that claim; at
best, it alleges that BGC invoked the Conditioned Payment

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31
Like McLoughlin, Sofocleous, who worked for Cantor
Fitzgerald, does not dispute that his decision to work for
another financial-services firm constituted Competitive
Activity under his separation agreement or Cantor Fitzgerald’s
partnership agreement.23 He claims only that he “received no
response” when he asked Cantor Fitzgerald about the scope of
the noncompetition condition. App. 354. And he argues now
that Cantor Fitzgerald’s silence “induc[ed] him” to work for
another firm. Opening Br. 53.
But Cantor Fitzgerald was not contractually obligated to
respond to Sofocleous’s queries or to give him interpretive
guidance. And the implied covenant did not require Cantor
Fitzgerald to reach beyond its contractual duties for
Sofocleous’s benefit. See Winshall, 76 A.3d at 817
(recognizing that a duty not to minimize earn-out payments in
a merger agreement did not imply an affirmative obligation to
maximize them); Nemec, 991 A.2d at 1128 (“A party does not
act in bad faith by relying on contract provisions for which that
party bargained where doing so simply limits advantages to
another party.”); cf. NAMA Holdings, 2014 WL 6436647, at
Device because BGC believed McLoughlin had solicited and
competed, and thus had violated the Competitive Activity
condition in two ways.
23 Sofocleous’s separation agreement prohibited him from
joining a “Competing Business,” and made compliance with
that prohibition a condition precedent to his receipt of
Conditioned Amounts. App. 558–59. Sofocleous also
remained bound by the corresponding condition in Cantor
Fitzgerald’s partnership agreement, which his separation
agreement expressly did not “waive[] or modif[y].” App. 556.

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*17 (“[T]he implied covenant does not establish a free-floating
requirement that a party act in some morally commendable
sense.”). Nor does Sofocleous allege that Cantor Fitzgerald
engaged in “fraud, deceit, or misrepresentation,” which could
implicate the implied covenant without a contractual duty.
Cincinnati SMSA L.P. v. Cincinnati Bell Cellular Sys. Co., 708
A.2d 989, 993 (Del. 1998) (internal quotation marks omitted).
In short, Sofocleous’s separation agreement and Cantor
Fitzgerald’s partnership agreement gave Cantor Fitzgerald the
“express contractual right” to withhold Sofocleous’s
Conditioned Amounts, leaving no gap for the implied covenant
to fill. Nemec, 991 A.2d at 1127. And Sofocleous has not
alleged that Cantor Fitzgerald’s General Partner exercised its
discretion in bad faith.
IV. CONCLUSION
For the reasons discussed above, we will affirm the
District Court’s judgment.

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