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LEGAL DICTIONARY

Blue Pencil Rule

What Is the Blue Pencil Rule?

Also known as the blue pencil doctrine, the blue pencil rule is a legal term that allows parts of a contract to remain enforceable while other parts are deemed unenforceable. The rule may not be invoked to change the original meaning of a contract.

The term comes from the concept of the court striking out the offending portions of the contract with a copy editor’s blue pencil. Editing marks made with a blue pencil, also known as a non-photo blue pencil, do not show up in lithographic or photographic reproduction processes.

Examples of Blue-Penciling

The most common use for the blue pencil doctrine in the U.S. is in non-compete agreements. U.S. courts often use the blue pencil rule as a way to examine and deliberate the restrictions in a contract, depending upon the evidence and the individual circumstances of the case.

States vary in how they view the blue pencil rule in business law. In some states, the rule refers only to striking out offending words or phrases without making any other changes while keeping the rest of the agreement enforceable and grammatically correct.

For example, after examining all the evidence, a court may reduce an inordinately long time specified in a contract for a non-compete agreement while enforcing the remainder of the employment contract. However, other states prohibit blue-penciling in non-compete agreements.

What States Are Blue Pencil States?

While the majority of states allow their courts to use the blue pencil contract law under reasonable circumstances, three prohibit its use, and some have unclear guidance.

The following table contains an overview of how the states regard the blue pencil rule.

State Position on Blue Penciling
Alabama Courts will only revoke the equitable parts of the covenant
Alaska Courts will only revoke the equitable parts of the covenant
Arizona Courts will only blue pencil contracts that are non-solicitation covenants or activity restraints
Arkansas Courts will not blue pencil a contract
California Courts cannot apply the blue pencil rule
Colorado Courts will only revoke the equitable parts of the covenant
Connecticut Courts will only revoke the equitable parts of the covenant
Delaware Courts will only revoke the equitable parts of the covenant
Florida Courts are bound to reform covenants
Georgia Courts will not blue pencil a contract
Hawaii Guidance for the blue pencil rule is unclear
Idaho Courts are bound to reform covenants
Illinois Courts will only revoke the equitable parts of the covenant
Indiana Courts will only blue pencil contracts that are non-solicitation covenants or activity restraints
Iowa Courts will only revoke the equitable parts of the covenant
Kansas Courts will only revoke the equitable parts of the covenant
Kentucky Courts will only revoke the equitable parts of the covenant
Louisiana Guidance for the blue pencil rule is unclear
Maine Courts will only revoke the equitable parts of the covenant
Maryland Guidance for the blue pencil rule is unclear
Massachusetts Courts will only revoke the equitable parts of the covenant
Michigan Courts will only revoke the equitable parts of the covenant
Minnesota Courts will only revoke the equitable parts of the covenant
Mississippi Courts will only revoke the equitable parts of the covenant
Missouri Courts will only revoke the equitable parts of the covenant
Montana Courts cannot apply the blue pencil rule
Nebraska Courts will not blue pencil a contract
Nevada Courts will only revoke the equitable parts of the covenant
New Hampshire Courts will only revoke the equitable parts of the covenant
New Jersey Courts will only revoke the equitable parts of the covenant
New Mexico Guidance for the blue pencil rule is unclear
New York Courts will only revoke the equitable parts of the covenant
North Carolina Courts will only blue pencil contracts that are non-solicitation covenants or activity restraints
North Dakota Courts cannot apply the blue pencil rule
Ohio Courts will only revoke the equitable parts of the covenant
Oklahoma Courts will only blue pencil contracts that are non-solicitation covenants or activity restraints
Oregon Courts will only revoke the equitable parts of the covenant
Pennsylvania Courts will only revoke the equitable parts of the covenant
Rhode Island Guidance for the blue pencil rule is unclear
South Carolina Courts will only blue pencil contracts that are non-solicitation covenants or activity restraints
South Dakota Guidance for the blue pencil rule is unclear
Tennessee Courts will only revoke the equitable parts of the covenant
Texas Courts are bound to reform covenants
Utah Guidance for the blue pencil rule is unclear
Vermont Courts will only revoke the equitable parts of the covenant
Virginia Courts will not blue pencil a contract
Washington Courts will only revoke the equitable parts of the covenant
Washington D.C. Guidance for the blue pencil rule is unclear
West Virginia Courts will only revoke the equitable parts of the covenant
Wisconsin Courts will not blue pencil a contract
Wyoming Courts will only revoke the equitable parts of the covenant

Why Is the Blue Pencil Rule Controversial?

Many companies rely on non-compete contracts to protect their interests. As a result, they push for restrictions on the amount of time before a former employee can work for a competitor.

However, employees argue that these non-competition time restrictions often are overly broad and represent an overreach by an employer. As a result, most legislatures in states that allow the rule invoke it only on a strict case-by-case basis.

Helpful Resources:

COBAR - Blue Pencil Doctrine

Hangley - Blue Penciling in the US

West Law - Blue Penciling

What Is the Blue Pencil Rule?

Also known as the blue pencil doctrine, the blue pencil rule is a legal term that allows parts of a contract to remain enforceable while other parts are deemed unenforceable. The rule may not be invoked to change the original meaning of a contract.

The term comes from the concept of the court striking out the offending portions of the contract with a copy editor’s blue pencil. Editing marks made with a blue pencil, also known as a non-photo blue pencil, do not show up in lithographic or photographic reproduction processes.

Examples of Blue-Penciling

The most common use for the blue pencil doctrine in the U.S. is in non-compete agreements. U.S. courts often use the blue pencil rule as a way to examine and deliberate the restrictions in a contract, depending upon the evidence and the individual circumstances of the case.

States vary in how they view the blue pencil rule in business law. In some states, the rule refers only to striking out offending words or phrases without making any other changes while keeping the rest of the agreement enforceable and grammatically correct.

For example, after examining all the evidence, a court may reduce an inordinately long time specified in a contract for a non-compete agreement while enforcing the remainder of the employment contract. However, other states prohibit blue-penciling in non-compete agreements.

What States Are Blue Pencil States?

While the majority of states allow their courts to use the blue pencil contract law under reasonable circumstances, three prohibit its use, and some have unclear guidance.

The following table contains an overview of how the states regard the blue pencil rule.

State Position on Blue Penciling
Alabama Courts will only revoke the equitable parts of the covenant
Alaska Courts will only revoke the equitable parts of the covenant
Arizona Courts will only blue pencil contracts that are non-solicitation covenants or activity restraints
Arkansas Courts will not blue pencil a contract
California Courts cannot apply the blue pencil rule
Colorado Courts will only revoke the equitable parts of the covenant
Connecticut Courts will only revoke the equitable parts of the covenant
Delaware Courts will only revoke the equitable parts of the covenant
Florida Courts are bound to reform covenants
Georgia Courts will not blue pencil a contract
Hawaii Guidance for the blue pencil rule is unclear
Idaho Courts are bound to reform covenants
Illinois Courts will only revoke the equitable parts of the covenant
Indiana Courts will only blue pencil contracts that are non-solicitation covenants or activity restraints
Iowa Courts will only revoke the equitable parts of the covenant
Kansas Courts will only revoke the equitable parts of the covenant
Kentucky Courts will only revoke the equitable parts of the covenant
Louisiana Guidance for the blue pencil rule is unclear
Maine Courts will only revoke the equitable parts of the covenant
Maryland Guidance for the blue pencil rule is unclear
Massachusetts Courts will only revoke the equitable parts of the covenant
Michigan Courts will only revoke the equitable parts of the covenant
Minnesota Courts will only revoke the equitable parts of the covenant
Mississippi Courts will only revoke the equitable parts of the covenant
Missouri Courts will only revoke the equitable parts of the covenant
Montana Courts cannot apply the blue pencil rule
Nebraska Courts will not blue pencil a contract
Nevada Courts will only revoke the equitable parts of the covenant
New Hampshire Courts will only revoke the equitable parts of the covenant
New Jersey Courts will only revoke the equitable parts of the covenant
New Mexico Guidance for the blue pencil rule is unclear
New York Courts will only revoke the equitable parts of the covenant
North Carolina Courts will only blue pencil contracts that are non-solicitation covenants or activity restraints
North Dakota Courts cannot apply the blue pencil rule
Ohio Courts will only revoke the equitable parts of the covenant
Oklahoma Courts will only blue pencil contracts that are non-solicitation covenants or activity restraints
Oregon Courts will only revoke the equitable parts of the covenant
Pennsylvania Courts will only revoke the equitable parts of the covenant
Rhode Island Guidance for the blue pencil rule is unclear
South Carolina Courts will only blue pencil contracts that are non-solicitation covenants or activity restraints
South Dakota Guidance for the blue pencil rule is unclear
Tennessee Courts will only revoke the equitable parts of the covenant
Texas Courts are bound to reform covenants
Utah Guidance for the blue pencil rule is unclear
Vermont Courts will only revoke the equitable parts of the covenant
Virginia Courts will not blue pencil a contract
Washington Courts will only revoke the equitable parts of the covenant
Washington D.C. Guidance for the blue pencil rule is unclear
West Virginia Courts will only revoke the equitable parts of the covenant
Wisconsin Courts will not blue pencil a contract
Wyoming Courts will only revoke the equitable parts of the covenant

Why Is the Blue Pencil Rule Controversial?

Many companies rely on non-compete contracts to protect their interests. As a result, they push for restrictions on the amount of time before a former employee can work for a competitor.

However, employees argue that these non-competition time restrictions often are overly broad and represent an overreach by an employer. As a result, most legislatures in states that allow the rule invoke it only on a strict case-by-case basis.

Helpful Resources:

COBAR - Blue Pencil Doctrine

Hangley - Blue Penciling in the US

West Law - Blue Penciling