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N.C. Court Of Appeals On Brink Of Slippery Non-Compete Slope

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Wall,JonBy Jonathan Wall

In Beverage Sys., LLC v. Associated Beverage Repair, LLC, 368 N.C. 693, 784 S.E.2d 457 (2016), the North Carolina Supreme Court clarified that North Carolina adheres to the “strict blue pencil rule;” that is, a trial court may strike distinct unreasonable restrictions in a noncompetition agreement but may not re-write provisions in order to make them enforceable, even if the parties, in the contract, authorize judicial revisions.  The court sent a message it is not interested in expanding blue-penciling, noting no good could come from changing the role of the trial court:

Allowing litigants to assign to the court their drafting duties as parties to a contract would put the court in the role of scrivener, making judges postulate new terms that the court hopes the parties would have agreed to be reasonable at the time the covenant was executed or would find reasonable after the court rewrote the limitation. We see nothing but mischief in allowing such a procedure.

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