A blue pencil rule is a legal standard that a governing body uses to decide whether to declare a contract invalid or only the unenforceable or infringing parts of that contract. The court also appeared to apply a contractual “severability clause” that the parties had included in the employment contract. In general, “severability” provisions allow otherwise enforceable provisions to always bind the parties, even if a clause is deemed unenforceable – the unenforceable provision is “separate” from the rest of the contract. In 23 LTD v. Herman, the fact that the non-solicitation clause was unenforceable did not invalidate the entire employment contract. With a blue pencil rule, the judiciary decides to invalidate an entire contract or only the unenforceable parts.4 min of reading The process begins with the meticulous measurement and identification by the lebanese Armed Forces technical team that meticulously measures and identifies a point on the ground marked with a metal pen and painted red. The pin is also measured by UNIFIL`s Geographic Information Services (GIS) team, which in turn validates the point with special mapping technology and confirms its approval of a blue layer. The Israeli side confirms its approval by marking the metal pin in yellow. The former employer appealed, arguing that the employment contract required the court to make the non-solicitation agreement unenforceable blue to make it otherwise enforceable under Colorado law. The former employer argued, in the alternative, that even if the parties did not agree to require Blue Penciling, the court was required to add a blue pencil to the non-solicitation agreement in order to make it enforceable.
The way relevance differs from the blue pencil rule is the scope and manner of the changes allowed in the contract. The final agreement of the Lebanese Armed Forces team is marked on the metal pin with an extra coat of red paint. What is a blue pencil rule? A contract is an agreement between two or more persons or parties to perform certain actions that creates a legal obligation for all parties to perform the specified tasks. However, a party may face a situation where a part of the contract, while legal and valid, is unenforceable. The Third Circuit Court of Appeals recently upheld the non-compete agreements that ADP, LLC (ADP) required of certain employees as a condition of receiving stock options. However, the Court of Appeal referred the cases back to the District Court with the instruction to “blue” the restrictive agreements that were too broad. The CAR is more restrictive than other agreements. It contains an enhanced non-solicitation commission that prohibits employees from recruiting (voluntarily or involuntarily) ADP clients for a period of one year after their termination to whom ADP “provides”, “makes available” or “reasonably expects” business within two years of the employee`s dismissal. Unlike the SRA, which only prohibits the acquisition of ADP customers with whom former employees were “involved or exposed,” the RCA also prohibits solicitation of all current and potential ADP customers. While the SRA limits the referral of former employees to ADP`s “marketing partners,” RCA prevents former employees from soliciting ADP`s “business partners,” which includes “referral partners” in addition to “marketing partners.” The term comes from the act of editing texts written with a blue pencil. Employers understand the basic principles of restrictions after termination and ensure that they provide substantial evidence if the exceptions in the contract are in the interest of the company.
Employees understand that restrictions after termination of employment are much broader than can be enforceable and, as a result, some restrictions are simply ignored. In such cases, a court may apply the blue pencil rule to modify post-termination restrictions to make them enforceable for the departing employee. However, the court is prohibited from reformulating or rewriting a clause of a contract. The Third Circuit decision is good news for New Jersey businesses because it confirms that the courts will rarely overturn a restrictive agreement in its entirety. However, businesses should also understand that failure to ensure that these provisions are closely tailored to the protection of legitimate business interests can lead to a blue pencil by the courts. “Here, the public interest points both ways – the ability of workers to use their marketable skills and the employer`s interest in protecting its goodwill and relationships with customers – and is ultimately ambiguous,” the court wrote. “Therefore, we are confident that the approach described above will balance the relative interests of ADP and Appeles in a manner consistent with the public interest, including the clear preference under New Jersey law to amend overly broad restrictive agreements rather than repeal them altogether.” Since the blue pencil rule is not a complete law, it is subject to many variations in several jurisdictions. .