Key Words

What is the meaning of:

SEVERABILITY?

Many contracts have a clause, usually found near the end of the document, that says something like this:

“In the event any provision of this agreement is declared invalid or unenforceable, only that provision shall be deemed invalid or unenforceable, and the remainder of this agreement, including all other provisions, shall remain in full force and effect.”

This clause may also be called a “Blue Pencil” clause, especially among older attorneys, as Judges used to use blue pencils to indicate provisions of an agreement they ruled invalid. I kid you not. (This reminds me of the phrase “Cut and Paste.” Younger folks do not believe we used to actually use a scissor and glue to negotiate and amend documents.)

In employment-related agreements, “severability” is used most commonly in two circumstances. First, in non-competition agreements and clauses. If, for example, a non-compete provision prohibits working for a competitor for ten years, or anywhere in the world, Courts commonly say, “Sorry, that provision is not enforceable, as a matter of basic fairness and good pubic policy.”

Second, some employment-related agreements require all disputes to be settled by arbitration, and requires the arbitration to be in a far away city, or at the expense of the employee, or without the use of attorneys, or according to other rules that are patently unfair. All of these would likely be declared invalid by most Judges, or “blue-penciled” to use the old-fashioned phrase.

Do not be concerned about “severability” provisions, although all words and phrases in contracts must be read carefully. “Severability” is generally a good, common sense concept, and fair to all – most especially to employees.

If you understand the “rules,” you can become a master of the “game.”

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