Let’s put the blue pencil down and be specific: the non-compete agreement is not an agreement at all.
Oklahoma State University’s Griffin Pivateau, associate professor of economics and legal studies in business for the Spears School of Business, was recently cited by the Supreme Court of Nevada. The Court relied heavily on Pivateau’s article, “Putting the Blue Pencil Down: An Argument for Specificity in Noncompete Agreements,” to shape the law of Nevada regarding blue pencil doctrine, where a count finds portions of a contract void but other portions are enforceable. Pivateau’s article argues that permitting courts to alter non-compete agreements, a contract that states an employee will not compete with his or her employer upon leaving employment for a specific period of time, violates public policy.
“In the case of Golden Road Motor Inn v. Islam, the court was faced with the question of whether to alter the non-compete agreement between an employee and her previous employer,” Pivateau said. “The employee left her job at a casino to take a competing position at another casino. Her former employer sued her and the casino that hired her, claiming that she violated a non-compete agreement. The key issue in this case concerned whether a court should alter the agreement using blue pencil doctrine, which is typically used in a majority of states to permit the reformation of an agreement after execution. In this case, applying the rule would have allowed the court to alter the agreement to make it enforceable.”
Pivateau’s article, originally published in the Nebraska Law Review in 2007, proposes an end to the blue pencil doctrine altogether, stating that it violates basic contractual principles and has been used to alter non-compete agreements.
“Basically, the blue pencil doctrine turns courts into attorneys after the fact,” Pivateau said. “The blue pencil doctrine allows the courts to strike ‘unreasonable’ clauses from a contract and leaving the rest as written, creating an agreement that the involved parties didn’t actually agree to and does nothing to address the underlying problem of non-compete agreements. The blue pencil doctrine harms employees, creates confusion and encourages litigation by allowing employers a ‘free ride’ on a contractual provision the employer is well aware would never be enforced.”
Pivateau’s article has previously been cited by the Supreme Court of Nebraska, also shaping the Court’s view on blue pencil doctrine. He has also been cited by other high courts for his work on sports-injury liability.
The judicial system’s continued use of legal scholarship establishes the importance of research conducted by the legal studies faculty at OSU. Pivateau predicts that more citations lie ahead for the department.
“The legal studies group here at the Spears School is composed of dedicated scholars engaged in research that is sure to continue to impact laws across the United States,” Pivateau said. “I am grateful for the support that OSU has provided for this important work. As a member of the legal studies faculty, I believe that one of the most important things we do is produce scholarship that benefits society. The greatest practical result of our work occurs when a court models its interpretation of state law on academic scholarship.”
For more information on other research being done by the Spears School faculty, visit the school’s Faculty Research website: https://spears.okstate.edu/research/.
To learn more about the Department of Economics and Legal Studies in Business, please visit the website: https://spears.okstate.edu/ecls/.