An article published in the American Bar Association’s Journal of Labor & Employment Law challenges the continued use of the blue pencil doctrine, under which courts modify overly broad noncompetition and restrictive covenant agreements to render them enforceable. The author argues that the doctrine is unjust and unworkable because it permits courts to rewrite private contracts in ways the parties never agreed to, undermining predictability and contractual discipline.
As the ABA analysis explains, several jurisdictions—including Nebraska, Nevada, and Wyoming—have rejected or sharply limited blue-penciling, concluding that restrictive covenants should be enforced only if reasonable as written. These courts favor “all-or-nothing” approaches that invalidate overbroad agreements outright, rather than salvaging them through judicial revision. The article contrasts this trend with states that continue to allow modification, creating a fragmented and uncertain enforcement landscape.
The author further notes that blue-penciling can incentivize employers to draft expansive restrictions with the expectation that courts will later narrow them, shifting risk onto employees and increasing litigation. From a governance perspective, this practice complicates workforce mobility, recruitment, and compliance efforts, while leaving both employers and employees uncertain about their rights until after judicial intervention.
For employers, the article underscores the importance of drafting restrictive covenants that are narrowly tailored, role-specific, and defensible on their face—particularly as courts and legislatures continue to scrutinize noncompetition practices. Overreliance on judicial modification can materially increase litigation risk and contract unenforceability.
Outside Legal Counsel LLP advises employers on drafting and auditing restrictive covenant agreements, navigating enforceability standards, and mitigating litigation exposure in an evolving noncompete landscape. Contact us today.
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