In Rose and Frank Co v. JR Crompton- Bros Ltd, the “Blue Pencil” rule was used to remove an unacceptable clause in an agreement of intent that appeared to exclude the jurisdiction of the courts. The unenforceable part was cut out, the rest of the agreement was valid and served to establish that the agreement was not defined as legally binding by the parties. The court of Appeal for Ontario`s recent decision in Veolia ES Industrial Services Inc/Brulé1 concerns the interpretation and applicability of a non-compete clause contained in a labour agreement and the extent of a worker`s trust obligations to a former employer. In early February 2020, the Alabama court issued a partial summary judgment in Hamilton`s favor and found that the non-compete prohibitions on the employment contract in Alabama were unenforceable. The Alabama court refused to reach an agreement on the grant agreement because of Delaware`s choice provision. In late February, Fast Pace filed an injunction in Delaware to argue Hamilton`s ownership or administration of Thrive or a similar business in Alabama and within 60 miles of any Fast Pace site. In agreement with Indiana`s refusal to rewrite agreements for the parties, Justice Loretta Rush stated that the parties could not commit to extending the blue pencil doctrine beyond the strictly limited contours that already exist under Indiana law: “Indiana courts use the Blue Pencil doctrine to revise non-compete agreements.” But this doctrine is really a randomere. On January 1, 2004, the parties entered into a three-year employment contract that was subject to the employer`s right to terminate the employment on an undecided basis, subject to the payment of the compensation to which the worker was entitled until the end of the term. The employee also had the right to terminate the employment contract with the employer with a period of 180 days. But when a court takes a “blue pencil” for a competition agreement, that`s what it does.
It makes a contract that the parties have not entered into for themselves. The FP UC Holdings case presents very concrete facts – which are unlikely to happen again in future cases. The facts were also particularly difficult for Fast Pace in many respects (for example. B the limited consideration in the grant agreement, the significant discrepancy between the geographic scope of Grant`s agreement and Fast Pace`s terms and conditions and the fact that Fast Pace probably first attempted to act in Alabama before acting in Delaware), and it is reasonable to believe that they had an impact on the way the court reviewed the case. However, the decision is instructive in that it deals with several common prohibitions on non-competition and provides lessons for employers and practitioners. A good reminder that the development of non-competition clauses is not a “one size fits all” process comes from the United Kingdom, where a recent decision of the Supreme Court of the United Kingdom dealt with the British courts` approach to “blue pencil” restrictive agreements that are too broad for term workers. In that case (Tillman/Egon Zehnder Ltd), the Supreme Court confirmed that the British courts should take a narrow approach in applying the “Blaustift” test to unreasonably restrictive alliances, i.e., a court may remove certain words (but, importantly, there will be no addition of additional words or alternative words) and, if the remaining conditions are reasonable, they are always supported by a counterparty, and the deletions do not result in substantial changes in the overall effect of the alliance. then the court will enforce the covenants. But if this narrow blue foundation is not possible and does not result in an enforceable provision after the removals are applied, the employer could not be lucky and the whole restriction could be considered null and void.