The plaintiff employer sued its former president for breach of a non-competition covenant and breach of fiduciary duty after he successfully bid against the employer on a public municipal tender.
The trial judge used blue-pencil severance to cure an ambiguous and unreasonable temporal restriction in the non-competition covenant and found the employee liable.
On appeal, the Court of Appeal held that blue-pencil severance was unavailable because the severed words were not trivial and there was no evidence the parties would have unquestionably agreed to the contract without them.
The Court also found no breach of fiduciary duty, as the employee did not use confidential information or compete unfairly.
The employee's cross-appeal was allowed and the action dismissed.