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What is Blue Penciling for a Non-Compete? [State Laws]

Updated on August 25th, 2022

Blue penciling allows a court to strike out unreasonable or overly broad terms of a non-compete to make it enforceable under state laws. Courts allow a blue pencil to be applied in 39 of 50 states. For it to be applied, a severability clause is commonly required as part of the covenant or agreement if blue-penciling is permitted.

Blue Penciling vs Reformation

Blue-penciling means striking out language in a non-compete to make it enforceable. If a non-compete cannot be made legal in this manner, the entire agreement is void.

Reformation allows a court to re-write portions of a non-compete to make it enforceable in the state. Under reformation, the courts will keep the intentions of the parties in mind when adding new language to the agreement.

Good Faith

Whether blue-penciling or reformation, the courts will determine whether a non-compete was written in good faith. It is known that employers may take advantage of such laws to pose undue hardships on an employee knowing a court can modify the agreement at a later time.

If a court determines a non-compete was written in bad faith, it may strike down the agreement altogether.

Severability Clause (sample)

Severability. If any provisions of this Agreement are held to be invalid, illegal, or unenforceable in any respect, the validity, legality, or enforceability of any other provisions and applications herein shall not in any way be affected or impaired.

Blue Penciling (State Laws)

StateIs Blue Penciling or Reformation allowed?
 AlabamaA court may void “specific restraints” if a non-compete is overly broad or unreasonable (§ 8-1-193). A court may also go as far as re-writing the duration or geographical areas to make an agreement reasonable (Mason Corporation v. Kennedy (1971)).
 AlaskaIf a non-compete was drafted in good faith, a court can alter the agreement to make it enforceable (Data Management, Inc. v. Greene (1988)).
 ArizonaAn Arizona court may “eliminate grammatically severable, unreasonable provisions” in a non-compete (Compass Bank v. Hartley (2006)).
 ArkansasArkansas courts can blue-pencil a non-compete to make broad provisions reasonable or enforceable (Ark. Code § 4-75-101). 
 CaliforniaCalifornia courts will not use a “blue pencil.” Case law holds that courts can revise an agreement “only where the parties have made a mistake” (Kolani v. Gluska (1988)).
 ColoradoIn Colorado, parties to a contract “cannot contractually obligate a court to blue pencil noncompete provisions that it determines are unreasonable” (23 LTD v. Herman (2019)).
 ConnecticutConnecticut courts can modify or blue pencil the terms of the restrictions and enforce them as modified. However, the non-compete agreement must state the intent to make the terms severable (Gartner Group, Inc. v. Mewes (1992)). Connecticut courts do not blue pencil if the terms are not severable. For example, a geographic restriction of a 50-mile radius that did not list separate towns could not be blue-penciled out of an employment contract because that would leave no area restriction (Timenterial, Inc. v. Dagata (1971)).
 DelawareDelaware courts do blue-pencil agreements to make them reasonable (United Healthcare Servs. v. Corzine (2019)).
 FloridaFlorida courts are required to “construe a restrictive covenant in favor of providing reasonable protection to all legitimate business interests established by the person seeking enforcement” (§ 542.335).
 GeorgiaGeorgia courts are permitted to blue-pencil non-compete agreements, thus making them enforceable (O.C.G.A. § 13-8-50, § 13-8-53(d)).
 HawaiiHawaii courts have not taken a stand on this matter.
 IdahoIdaho courts will blue-pencil an agreement to make it reasonable and enforceable (§ 44-2701, § 44-2703).
 IllinoisFor non-compete agreements entered into on or after January 1, 2022, in some circumstances, a court may choose to reform or sever provisions of a non-compete agreement rather than hold such agreement unenforceable. The court can consider the following factors: the fairness of the restraints as originally written, whether the original restriction reflects a good-faith effort to protect a legitimate business interest of the employer, the extent of the reformation, and whether the parties included a clause authorizing such modifications in their agreement (820 ILCS 90/35)
 IndianaIndiana courts may only delete language from overbroad agreements but cannot reform or add to these agreements (Heraeus Medical, LLC v. Zimmer, Inc (2019)).
 IowaIowa courts do modify restrictive covenants (Ehlers v. Iowa Warehouse Company (1971)).
 KansasKansas courts do amend overbroad non-compete agreements (Puritan-Bennett Corp. vs. Richter (1984)).
 KentuckyKentucky courts are “empowered to reform or amend restrictions in a non-compete clause if the initial restrictions are overly broad or burdensome” (Kegel v. Tillotson (2009)). 
 LouisianaLouisiana courts reform a non-compete in limited circumstances provided the agreement contains a severability clause (Brock Services, L.L.C. v. Richard Rogillio (2020)).
 MaineMaine courts blue-pencil overly broad agreements to the extent necessary to protect the employer’s business interests (§599-A). 
 MarylandMaryland courts limit blue-penciling to “the removal of offending language” but not to “the addition of words or phrases in an effort to make the restrictive covenant reasonable” (Deutsche Post Global Mail, Ltd. v. Conrad (2003)).
 MassachusettsMassachusetts courts modify covenants that are “entirely too broad and unreasonable” and therefore unenforceable (All Stainless, Inc. vs. Colby (1974)).
 MichiganMichigan courts modify agreements to make them reasonable and enforceable (Michigan Antitrust Reform Act 445.774a). 
 MinnesotaCourts can blue-pencil agreements in Minnesota to the minimum extent necessary to make them reasonable (Yonak v. Hawker Well Works, Inc. (2015)).
 MississippiMississippi courts do blue-pencil agreements to make them reasonable (Hensley v. E. R. Carpenter Co., Inc. (1980)).
 MissouriMissouri case law permits courts to modify agreements under certain circumstances (Whelan Sec. Co. v. Kennebrew (2012)).
 MontanaMontana law allows courts to partially enforce contracts, but the blue-penciling practice is severely limited (MCA 28-2-604).
 NebraskaNebraska courts don’t blue-pencil agreements and have ruled that non-competes must be enforced “as written or not … at all” (Unlimited Opportunity, Inc. v. Waadah (2015)). 
 NevadaNevada courts can revise agreements “to the extent necessary” (NRS 613.195(5)).
 New HampshireNew Hampshire courts blue-pencil overbroad agreements made “upon a showing of his exercise of good faith in the execution of the employment contract” (Smith, Batchelder & Rugg v. Foster (1979)).
 New JerseyNew Jersey case law allows courts to modify overly broad restrictions (ADP, LLC v. Rafferty, et al. (2018)).
 New MexicoNew Mexico courts have not taken a stand on this matter.
 New YorkNew York courts can modify overbroad agreements in order to make them enforceable but are not required to do so. Courts enforce covenants only where “the employer demonstrates an absence of overreaching, coercive use of bargaining power, or other anti-competitive misconduct, but has in good faith sought to protect a legitimate business interest, consistent with reasonable standards of fair dealing” (BDO Seidman v. Hirshberg (1999)).
 North CarolinaNorth Carolina courts do not revise overly broad noncompete agreements, but will strike through unenforceable language (Beverage Systems of the Carolinas, LLC v. Associated Beverage Repair, LLC (2016)).
 North DakotaNorth Dakota law does not permit non-compete agreements except in specific situations (N.D. Cent. Code § 9-08-06). 
 OhioOhio courts have the power to strike out unreasonable language and to “modify or amend” agreements to ensure they are reasonable (Raimonde v. Van Vlerah (1975)).
 OklahomaOklahoma courts refuse to blue-pencil agreements and to even acknowledge many non-compete agreements (§ 15-219A).
 OregonOregon courts blue-pencil overbroad agreements (Brinton Business Ventures, Inc. v. Searle (2017)).
 PennsylvaniaPennsylvania courts blue-pencil when “a covenant imposes restrictions broader than necessary to protect the employer” (Pharmethod, Inc. v. Caserta (2010)).
 Rhode IslandThe Rhode Island Noncompetition Agreement Act (RINAA) prohibits non-compete agreements between an employer and low-wage employees, minors, undergraduate and graduate students enrolled in educational institutions, and employees who are nonexempt under the federal Fair Labor Standards Act (R.I. Gen. Laws § 28-59-3(a)). For employees who are not covered under the RINAA, Rhode Island courts may blue pencil non-compete agreements. If an unreasonable clause may be “blue-lined” out, leaving a reasonable clause intact, the reasonable section will be enforced (Dial Media, Inc. v. Schiff (1985)).
 South CarolinaSouth Carolina case law holds that “restrictions in a non-compete clause cannot be rewritten by a court or limited by the parties’ agreement, but must stand or fall on their own terms” (Poynter Invs. v. Century Builders (2010)).
 South DakotaSouth Dakota courts modify an unreasonable agreement (Ward v. Midcon, Inc. (1998)).
 TennesseeTennessee courts “may modify an unreasonable covenant so as to render it reasonable” (Vantage Technology LLC v. Cross (1999)).
 TexasTexas courts are required to reform covenants that “impose a greater restraint than is necessary to protect the goodwill or other business interest of the promisee” (§ 15.50).
 UtahUtah courts amend non-compete agreements on a case-by-case basis (System Concepts, Inc. v. Dixon (1983)).
 VermontVermont courts do not blue-pencil (Roy’s Orthopedic, Inc. v. Lavigne (1985)).
 VirginiaVirginia courts do not blue-pencil (Lasership, Inc. v. Watson (2009)).
 WashingtonWashington courts enforce non-competes to the extent they are reasonable and modify the covenants that are not (Armstrong v. Taco Time (1981)).
Washington D.C.Washington D.C. banned non-competes in 2020 (D.C. Law 23-209)
West VirginiaWest Virginia has not taken a stand on this matter.
 WisconsinWisconsin law states that unreasonable non-competes are void and unenforceable (§ 103.465).
 WyomingWyoming case law prevents the practice of blue-penciling (Hassler v. Circle C Resources (2022)).