Remember that most of the cases I mentioned were decided before the addition of the Nevada Non-Competition Agreements Act in 2017 and came into effect on June 3, 2017, allowing the courts to consider applying a non-compete clause on the basis of the new law. Finally, this act responds to The Golden Road Motor Inn, Inc. v. Islam, in which the Nevada Supreme Court rejected the “blue pencil” doctrine and ruled that state courts could not change non-competition bans. Prior to this Act, if a non-competition agreement contained even a provision that “goes beyond what is necessary to protect the interests of the employer,” then the whole agreement was unenforceable. If the dismissal of a worker is due to the reduction of violence, restructuring or a similar restructuring of the employer, a non-compete agreement is enforceable only during the period during which the employer pays the worker`s salary, benefits or equivalent remuneration, including the resilient payments. Therefore, employers who are currently entering into non-compete agreements under an employment agreement should review them accordingly. When employers provide for the dismissal of a worker, they must amend their current non-competition provisions or enter into a new severance agreement containing non-competitive provisions with a set of applicable severance pay. Finally, the law allowed “blue pencils,” which issued the recent Nevada Supreme Court decision at Golden Road Motor Inn, Inc. v. Islam (to discuss this decision, click here).
“Blue Penciling” refers to a court`s ability to remove or modify inappropriate conditions or provisions of a non-competition agreement and enforce the revised agreement. In the Golden Road Motor Notice of Appeal, the Tribunal rejected the adoption of the “blue pencil” doctrine because the Court found that it was not for the Court to rewrite the parties` contract and that the courts did not have the authority to enter into private agreements. The Court of Justice found that an inappropriate clause in a non-competition agreement rendered the entire agreement unenforceable. Under Nevada`s amended law, the court now has the power to review a non-compete agreement to the extent necessary and enforce the revised agreement.