Which States Enables Blue-Pencilling of Non-Compete Agreements?

States around the nation vary in just how they approach the enforcement of unreasonable non-compete arrangements. While most of states enable their courts to “blue pencil” or revise restrictive covenants to make them reasonable, 3 states do not permit such improvement, and also 4 states have no clear legal guidance on whether blue-pencilling is permitted, leaving companies in limbo.

Nonetheless, even in those states where the courts consistently blue-pencil non-compete agreements, employers must not rely upon that treatment for several reasons:

  1. Blue-pencilling is expensive as it can only be done after a claim is filed;
  2. Blue-pencilling is unpredictable since it depends on the court appointed to the situation what she or he considers to be affordable;
  3. Blue-pencilling can lead to a company not being able to recoup damages triggered by a breach of a non-compete agreement that occurred before a court rewording the arrangement.

Hence, it is constantly best to prepare a sensible non-compete contract as opposed to rely on the blue-pencil doctrine and also hope that a court will certainly “fix” the contract when the time comes.

Leiza Dolghih is a partner at Lewis Brisbois Bisgaard & & Smith LLP in Dallas, Texas as well as a Co-Chair of the company’s Trade Secrets and Non-Compete Disputes national method. Her method consists of commercial, intellectual home and also employment lawsuits. You can contact her directly at Leiza.Dolghih@LewisBrisbois.com!.?.! or (214)722-7108. Released at Fri, 05 Feb 2021 15:58:35 +0000

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