Heraeus Medical, LLC v. Zimmer, Inc.Annotate this Case
The Supreme Court vacated the section of the trial court's preliminary injunction purporting to enforce an unreasonable restrictive covenant in a noncompetition agreement, holding that parties to noncompetition agreements cannot use a reformation clause to contract around the principle that reviewing courts may delete, but not add, language to revise unreasonable restrictive covenants under Indiana's "blue pencil doctrine."
Under the blue pencil doctrine, courts can make overbroad covenants reasonable by deleting language, but they may not add terms. The noncompetition agreement in this case contained an overbroad nonsolicitation covenant that contained a reformation clause authorizing the court to modify unenforceable provisions. The trial court granted a preliminary injunction enforcing the covenant. The court of appeals concluded that the nonsolicitation covenant was overbroad but revised the covenant to make it reasonable under the reformation clause. The Supreme Court granted transfer and held that since the nonsolicitation covenant could not be blue penciled, but rather required additional language to limit the scope of its restrictive covenants, it could not be enforced despite its reformation clause.