By Ari Lichterman, Esq.
Introduction
Employers in Maryland and Washington, D.C. face complex legal challenges when it comes to protecting their business interests. This guide explains key employment law concepts and how businesses can safeguard themselves—particularly when using restrictive covenants.
When Is a Restrictive Covenant Too Broad?
Employers often rely on restrictive covenants to protect legitimate business interests, such as confidential information and client relationships. But what happens when those restrictions go too far? Do employers lose all protection?
The short answer: maybe.
Under Maryland law, a restrictive covenant must be reasonably limited in scope and duration. It must protect a legitimate business interest without imposing undue hardship on the employee or violating public policy.
If a covenant is too broad, a court may deem it unenforceable. However, that does not necessarily mean the entire agreement will fail. In some cases, courts may preserve the enforceable portions.
The “Blue Pencil” Doctrine Explained
This is where the “blue pencil doctrine” comes into play.
The term originates from the editorial practice of revising text with a blue pencil. In legal terms, it refers to a court’s ability to remove—or “strike out”—problematic language from a contract while leaving the rest intact.
Although modern edits are digital, the concept remains the same: courts may delete offending language, but they will not rewrite or add new terms to fix an agreement
How Maryland Courts Apply the Doctrine
Maryland courts apply the blue pencil doctrine narrowly.
A court will only use it when the problematic language is clearly severable—meaning it can be removed without rewriting the contract. If the provision cannot stand on its own after removal, the entire covenant may be invalidated.
Importantly:
- Courts may delete language
- Courts will not rewrite or add language
- The remaining provision must still make sense independently
Courts also limit their discretion in more nuanced ways. For example, they will not remove “dominant” language from a single, indivisible promise. However, if a covenant contains distinct and separable promises, a court may strike one and enforce the other.
Real-World Example: Aerotek, Inc. v. Obercian
Consider a common scenario: a growing company wants to protect its client relationships and confidential information. To do so, it requires a new hire to sign a restrictive covenant.
The agreement includes the following clause:
For a period of eighteen months after termination of Employee’s employment with Employer, Employee agrees not to directly or indirectly engage in, or be employed by any business that is engaging in, any aspect of Employer’s business for which Employee performed services or about which Employee obtained Confidential Information during the two (2) years preceding termination, within a fifty (50) mile radius.
In Aerotek, Inc. v. Obercian, the court found that this provision contained two separate promises:
- A restriction on directly or indirectly engaging in similar work
- A broader restriction on being employed by any business engaged in that work
Because these promises were separated by the word “or,” the court determined they were divisible.
The court then “blue penciled” the overly broad portion—removing the phrase:
“or be employed by any business that is engaging in”
After removing that language, the remaining restriction was considered reasonable and enforceable.
This case illustrates a key point: precision in drafting matters. Had the clause been written more narrowly from the start, the entire provision might have been upheld.
Key Takeaways for Employers
Because Maryland courts apply the blue pencil doctrine sparingly, employers should not rely on courts to fix overly broad agreements.
Keep these principles in mind:
1. Draft with precision
Tailor restrictions to the employee’s actual duties, specific client relationships, and reasonable geographic and time limits.
2. Structure for severability
Whenever possible, separate restrictions into distinct, independent clauses so that one invalid provision does not doom the entire agreement.
3. Avoid overreach
Overly aggressive or indivisible language can render the entire covenant unenforceable.
How Luchansky Law Can Help
The attorneys at Luchansky Law have extensive experience drafting enforceable restrictive covenants that protect business interests while minimizing legal risk.
For more information, contact:
- 📞 410.522.1020
- 📧 ari@luchanskylaw.com
