Wash. Court of Appeals published opinion — 387844_pub.pdf

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Wash. Court of Appeals published opinion — 387844_pub.pdf
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Washington (state)
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For the current opinion, go to https://www.lexisnexis.com/clients/wareports/.

No. 38784-4-III
Elgiadi v. Wash. State Univ.

C. The doctrine of severability

Before we address Mr. Elgiadi’s arguments, we discuss what his remedy would be

if he succeeds in having the no-rehire provision declared void and unenforceable.

It is uncontested that the no-rehire provision was material in obtaining the State’s

assent to pay Mr. Elgiadi $295,000. The paragraph containing the no-rehire provision

provides:

The parties understand and agree that [the State] has required this paragraph
as a material provision of this Agreement and that any breach of this
paragraph shall be a material breach of this Agreement and that the State
would be irreparably harmed by violation of this provision.

CP at 30.

After oral argument, we asked the parties for supplemental briefing discussing

what the proper remedy would be were we to invalidate the no-rehire provision. Mr.

Elgiadi argues a provision in a settlement agreement that violates public policy can be

“lined out” in accordance with the “blue pencil test” and the remainder of the agreement

enforced. Appellant’s Suppl. Br. at 2. The State argues the entire agreement fails if the

provision declared unenforceable was objectively material to the parties’ agreement.

Resp’t’s Suppl. Br. at 2-10. We agree with the State.

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For the current opinion, go to https://www.lexisnexis.com/clients/wareports/.

No. 38784-4-III
Elgiadi v. Wash. State Univ.

When a court declares a provision in an agreement unenforceable, a question arises

whether the provision is severable from the contract or whether the entire contract fails.

Years ago, our Supreme Court rejected the “blue pencil test” of contract severability: