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the basis of a finding that Angel’s inappropriate discipline of 

Cassandra placed both children at risk of harm. There is some 

indication in the record that this discipline was intended as 

punishment for Cassandra’s “back-talking and not doing her 

homework.” Following adjudication, there was a subsequent 

incident of inappropriate discipline directed at Moira which 

prompted the juvenile court to specifically order that Angel 

“shall not lock Moira . . . in her room at any time.” Given 

the court’s finding that Angel had made “minimal progress 

. . . to alleviate the causes of the Court’s adjudication,” to 

which no exception was taken on appeal, and the recommendation of DHHS against homeschooling, the juvenile court 

was entirely justified in concluding that Moira’s best interests 

would not be served by an educational setting which would 

place her under Angel’s exclusive control with no opportunity 

for regular interaction with other adults interested in her welfare. The court’s prohibition of homeschooling was directly 

related to the parental conduct which resulted in adjudication, and the court properly exercised its discretion to prohibit 

homeschooling as a part of a rehabilitation program to address 

such conduct.

CONCLUSION

For the foregoing reasons, we affirm the judgment of the 

separate juvenile court.

Affirmed

Unlimited Opportunity, Inc., doing b

Jani-King of Omaha, appellant, v

Waadah, an individual, doing busi

Legbo Services, et al., appelle

___ N.W.2d ___

Filed April 10, 2015. No. S-14-012.

1. Contracts: Appeal and Error. The interpretation of a contract involves a 

question of law, in connection with which an appellate court has an obligation to reach its conclusions independent of the determinations made by the 

court below.
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2. Restrictive Covenants: Courts: Reformation. It is not the function of the 

courts to reform a covenant not to compete in order to make it enforceable.

3. Restrictive Covenants: Employer and Employee. A partial restraint of trade 

such as a covenant not to compete must meet three general requirements to 

be valid. First, the restriction must be reasonable in the sense that it is not 

injurious to the public. Second, the restriction must be reasonable in the sense 

that it is no greater than reasonably necessary to protect the employer in some 

legitimate business interest. Third, the restriction must be reasonable in the 

sense that it is not unduly harsh and oppressive on the party against whom it 

is asserted.

4. Restrictive Covenants: Sales. A covenant not to compete ancillary to the sale 

of a business must be reasonable in both space and time so that it will be no 

greater than necessary to achieve its legitimate purpose. Whether such a covenant not to compete is reasonable with respect to its duration and scope is 

dependent upon the facts of each particular case.

Appeal from the District Court for Douglas County: W. 

Russell Bowie III, Judge. A

Edward F. Pohren, of Smith, Gardner, Slusky, Lazer, Pohren 

& Rogers, L.L.P., for appellant.

Philip J. Kosloske and Ryan M. Hoffman, of Anderson, 

Bressman & Hoffman, P.C., L.L.O., for appellees.

Heavican, C.J., Wright, Connolly, Stephan

Miller-Lerman, and Cassel,

Heavican, C

I. INTRODUCTION

In 2008, appellant Unlimited Opportunity, Inc., doing business as Jani-King of Omaha (Jani-King), granted appellee 

Anthony Waadah a franchise in the Omaha, Nebraska, area. 

The franchise agreement was ultimately broken, and Waadah 

diverted a number of Jani-King’s Omaha customers to his new 

business. Jani-King filed suit against Waadah for breach of the 

noncompete clause in the franchise agreement.

The district court found the noncompete clause included 

an unreasonable restraint on competition and refused to sever 

the offending subpart from the larger noncompete clause. 

Jani-King asks us to reconsider our law against severability 

as generally set out in H & R Block Tax Servs. v. Circle A 
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Enters.1 and CAE Vanguard, Inc. v. Newman.

2

 We reaffirm our 

stance against severability of noncompete clauses and affirm 

the judgment of the district court.

II. BACKGROUND

The parties have stipulated to the following facts as summarized below:

Jani-King is a franchisor of professional cleaning and maintenance services. Its franchisees belong to a “franchise system” under the control of Jani-King. Jani-King provides to 

its franchisees its trade name, name recognition, goodwill, 

and reputation.

Under Jani-King’s franchise model, Jani-King identifies, 

markets to, solicits, and negotiates with customers in a given 

operations area. Jani-King secures each client contract and then 

turns the client over to the franchisee. The franchisee provides 

the contracted-for janitorial services.

The parties have further stipulated that the noncompetition 

covenant in the agreement protected “the reputation and goodwill associated with the franchise’s trademarks,” Jani-King’s 

“overall investment in its franchise system,” and the “proprietary information and knowledge [Jani-King] disclosed to franchisees” through the course of the franchise relationship. The 

parties also stipulated that the “intended purpose” of the noncompetition agreements for the franchise was the “protection 

of the integrity of the overall franchise system [and] protection 

of current franchisees in the Jani-King system.”

The section of the franchise agreement containing the disputed noncompete clause states in pertinent part:

Franchisee . . . agrees that, during the term of this 

Agreement and for a continuous uninterrupted period of 

(2) years thereafter . . . commencing upon expiration or 

termination of this Agreement, . . . Franchisee . . . shall 

not . . . :

. . . .

1 H & R Block Tax Servs. v. Circle A Enters., 269 Neb. 411, 693 N.W.2d 548 

(2005).

2 CAE Vanguard, Inc. v. Newman, 246 Neb. 334, 518 N.W.2d 652 (1994).
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632 290 NEBRASKA REPORTS

(d) Own, maintain, operate, engage in or have any 

interest in any business (hereinafter referred to as 

“Competing Business”) which is the same as or similar to the business franchised under the terms of this 

Agreement, which Competing Business operates, solicits 

business, or is intended to operate or solicit business: 

(i) within the Territory of this Agreement; and (ii) for a 

period of one (1) year commencing upon expiration or 

termination of this Agreement (regardless of the cause for 

termination), in any other territory in which a Jani-King 

franchise operates.

(Emphasis supplied.) This clause prohibited a franchisee from 

operating for 2 years the same or a similar business within 

the territory of the agreement. It also prohibited a franchisee 

from operating for a period of 1 year a competing business 

in any other territory in which a Jani-King franchise operates. 

The clause was set to run upon expiration or termination of 

the agreement.

Waadah was a franchisee of Jani-King. In 2010, Jani-King 

began receiving reports from its customers that Waadah was 

attempting to divert Jani-King customers for his own janitorial 

business. Notably, in January 2010, a dairy company terminated its relationship with Jani-King and immediately began 

receiving janitorial services from Waadah. Jani-King claims 

this constituted a breach of the Jani-King franchise contract, 

and Jani-King terminated its relationship with Waadah.

In the approximately 18 months following this contract termination, Waadah formed Legbo Services of Omaha (Legbo). 

Legbo began providing janitorial services to several of JaniKing’s client accounts. Legbo also secured janitorial contracts 

with new clients in the Omaha area. The parties stipulated that 

had the franchise agreement been followed, these new contracts would have belonged to Jani-King.

Jani-King sued Waadah; his wife; and Legbo Group, LLC, 

a corporation run by his wife, seeking to enforce and receive 

damages from the breach of the franchise agreement. For 

ease of reading, in the remainder of the opinion, we generally speak of the defendants as Waadah. In the district court, 
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Jani-King alleged that the 2-year noncompete clause had 

been breached.

After a bench trial, the district court issued a ruling for 

Waadah. In so finding, the court relied on H & R Block Tax 

Servs. and held that it was unreasonable to restrict competition outside of the area in which Waadah actually conducted 

business.3 Since the 1-year restraint restricted commencement 

of a competing business “in any other territory in which a 

Jani-King franchise operates,” and since Jani-King operated 

in countries throughout the world, this restraint was deemed 

unreasonable in geographic scope. The court found it need not 

address the remaining parts of the noncompete clause, because 

“‘it is not the function of the courts to reform a covenant not 

to compete in order to make it enforceable.’”

The court also dismissed a tortious interference claim, concluding that competitors fall under a privilege to interfere in 

business relationships. Because the court found the covenant 

not to compete legally unenforceable, Waadah was found to 

be a competitor to Jani-King and was immune from a claim of 

tortious interference.

Jani-King appealed and petitioned this court for a bypass of 

the Nebraska Court of Appeals. We granted that motion.

III. ASSIGNMENTS OF ERROR

Jani-King (1) “seeks a reexamination of the Nebraska public policy as it pertains to non-competition covenants in franchise agreement[s], to overrule those parts” of H & R Block 

Tax Servs.4 that “bar ‘severability’ of integrated restraints of 

trade in franchise agreements and that do not permit courts 

to ‘reform’ the scope or duration of covenants against competition within a franchise agreement”; (2) assigns, restated, 

as error the district court’s analysis of the 1-year restraint 

because (a) no evidence as to that restraint was presented, 

(b) Jani-King did not seek enforcement of that restraint, and 

(c) the 1-year restraint was moot by the passage of time; 

3 H & R Block Tax Servs., supra note 1.

4 Id.
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and (3) assigns, restated, as error the finding that the noncompete clause was unreasonable and, thus, the finding that 

the breach of contract and tortious interference claims must 

be dismissed.

IV. STANDARD OF REVIEW

[1] The interpretation of a contract involves a question of 

law, in connection with which an appellate court has an obligation to reach its conclusions independent of the determinations made by the court below.5

V. ANALYSIS

This case presents two distinct issues: first, whether the 

1-year noncompetition covenant was severable from the 2-year 

covenant, and if not, second, whether the entirety of the noncompetition agreement is valid and enforceable.

1. Severabilit

[2] We turn first to severability. This court has long held 

that it is not the function of the courts to reform a covenant 

not to compete in order to make it enforceable.6 We have 

declined to apply the “‘blue pencil’ rule,” which allows for 

the reformation of covenants to make them enforceable, stating that “we must either enforce [a covenant] as written or not 

enforce it at all.”7 We have found that “reformation is tantamount to the construction of a private agreement and that the 

construction of private agreements is not within the power of 

the courts.”8

Though this position against the severability of noncompete 

covenants is the minority one, it is backed by important public 

policy considerations. Severability of noncompete covenants is 

against public policy because it creates uncertainty in employees’ contractual relationships with franchisors, increases the 

5 Id.

6 See CAE Vanguard, Inc., supra note 2. See, also, Gaver v. Schneider’s 

O.K. Tire Co., 289 Neb. 491, 856 N.W.2d 121 (2014).

7 CAE Vanguard, Inc., supra note 2, 246 Neb. at 338, 339, 518 N.W.2d at 

655, 656.

8 Id. at 339, 518 N.W.2d at 655.
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potential for confusion by parties to a contract, and encourages 

litigation of noncompete clauses in contracts.9

In H & R Block Tax Servs., we affirmed our rejection of the 

blue pencil rule.10 There, a noncompete clause restrained franchisees from competing in the business of preparing tax returns 

within 45 miles of the franchise territory for 1 year following 

termination of the franchise contract. One of the defendants 

had done tax planning for the franchisor in Ogallala, Nebraska, 

and later moved to North Platte, Nebraska, where she began 

an independent tax return preparation business. Some of her 

former clients from the franchisor’s similar business wished to 

retain her services after she moved. The former clients pursued 

and enlisted her services in North Platte.11 In that case, we 

found that separate paragraphs of a covenant not to compete 

were not severable, so that if any portion of the covenant was 

invalid and unenforceable, the remainder of it was unenforceable as well.12

In this case, the district court found that the 1-year provision restricting competition anywhere a Jani-King franchise 

operates was unenforceable and did not further consider JaniKing’s claim with respect to the 2-year covenant. In its first 

assignment of error, Jani-King argues that this was error, 

asking that we reexamine Nebraska law barring severability 

of integrated restraints of trade and that we instead permit 

courts to reform or modify the scope or duration of covenants 

against competition, particularly within the context of franchise 

agreements. Jani-King further asserts that Nebraska’s Franchise 

Practices Act (Act)13 should guide our decision and that H & R 

Block Tax Servs., as well as other Nebraska case law rejecting 

the blue pencil rule, is contrary to the Act.14

9 Griffin Toronjo Pivateau, Putting the Blue Pencil Down: An Argument for 

Specificity in Noncompete Agreements, 86 Neb. L. Rev. 672 (2008).

10 H & R Block Tax Servs., supra note 1.

11 Id.

12 Id.

13 Neb. Rev. Stat. §§ 87-401 through 87-410 (Reissue 2014).

14 Brief for appellant at 19.
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We decline Jani-King’s invitation to reconsider our rejection 

of the blue pencil rule. As explained above, public policy considerations dictate our conclusion that such agreements should 

not be severable.

We also disagree that the Act is contrary to our case law. 

The section of the Act declaring its “Legislative intent” states:

The Legislature . . . declares that distribution and sales 

through franchise arrangements in the state vitally affect 

the general economy of the state, the public interest 

and public welfare. It is therefor necessary in the public 

interest to define the relationship and responsibilities 

of franchisors and franchisees in connection with franchise arrangements.15

While the Act defines the relationship and responsibilities 

between franchisors and franchisees, it does not reference noncompete covenants in franchise agreements.

Nor is the Act contrary to the severability holdings of 

H & R Block Tax Servs. and CAE Vanguard, Inc.16 Essentially, 

the Act attempts to stabilize relationships between franchisors 

and franchisees by providing guidelines on what is and what 

is not acceptable in the context of a franchise agreement. 

For example, the sections of this Act state that it is a violation for a franchisor to terminate a franchise without good 

cause, to restrict the sale of securities or stock to employees 

or other personnel of the franchise, to impose unreasonable 

standards of performance upon a franchisee, or to prohibit 

the right of free association among franchisees for any lawful purpose.17 However, the Act does not discuss noncompete 

covenants in a franchise agreement. We decline to conclude 

that the Act dictates public policy for the severability of franchise agreements.

For these reasons, we conclude that the 1-year covenant 

not to compete is not severable from the 2-year covenant. 

15 § 87-401.

16 See, H & R Block Tax Servs., supra note 1; CAE Vanguard, Inc., supra

note 2.

17 § 87-406(3), (4), and (5).
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The district court was correct to consider the two covenants 

together and find the entire clause invalid if one portion 

is invalid.

2. Enforceabil

We next turn to whether the district court erred in finding 

the noncompete agreement unenforceable as Jani-King contends in its second and third assignments of error.

(a) Nature of Transaction

Whether a noncompete clause is valid and enforceable 

requires us to categorize the covenant as either an employment 

contract or the sale of goodwill.

[3] Regardless of the context, a partial restraint of trade such 

as a covenant not to compete must meet three general requirements to be valid.18 First, the restriction must be reasonable 

in the sense that it is not injurious to the public.19 Second, the 

restriction must be reasonable in the sense that it is no greater 

than reasonably necessary to protect the employer in some 

legitimate business interest.20 Third, the restriction must be reasonable in the sense that it is not unduly harsh and oppressive 

on the party against whom it is asserted.21

[4] Nebraska courts are generally more willing to uphold 

promises to refrain from competition made in the context of 

the sale of goodwill as a business asset than those made in 

connection with contracts of employment,22 reasoning that in 

the sale of a business, “[i]t is almost intolerable that a person 

should be permitted to obtain money from another upon solemn agreement not to compete for a reasonable period within 

a restricted area, and then use the funds thus obtained to do 

18 H & R Block Tax Servs., supra note 1.

19 Id. See, also, Polly v. Ray D. Hilderman & Co., 225 Neb. 662, 407 N.W.2d 

751 (1987).

20 H & R Block Tax Servs., supra note 1.

21 Id.

22 Id.; Presto-X-Company v. Beller, 253 Neb. 55, 62, 568 N.W.2d 235, 239 

(1977).
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the very thing the contract prohibits.”23 Thus, a covenant not 

to compete ancillary to the sale of a business must be reasonable in both space and time so that it will be no greater than 

necessary to achieve its legitimate purpose. Whether such 

a covenant not to compete is reasonable with respect to its 

duration and scope is dependent upon the facts of each particular case.24

In H & R Block Tax Servs., the franchisor provided various goods and services to its franchisees, including training, advertising, and forms.25 It retained significant control 

over its franchisees, but the “main purpose of obtaining a 

franchise from [the franchisor was] to trade on the reputation and goodwill of its service mark and thereby acquire 

customers.”26 There, we found that the franchise agreement 

was analogous to the sale of a business for purposes of determining enforceability of the covenant not to compete.27 We 

then applied the analysis outlined for the sale of goodwill of 

a business asset to determine whether the noncompete clause 

was valid.28

We conclude that the characterization of the noncompete 

agreement contained in a franchise agreement used in H & R 

Block Tax Servs. is the correct one, and we apply the standard 

used in the sale of goodwill.

(b) Reasonableness of Restriction

We turn next to whether the noncompete agreement in this 

case was reasonable in its restriction of competition. There is 

no allegation that the restriction is injurious to the public. We 

therefore focus our analysis on whether the covenant was reasonable in both space and time such that the restraint imposed 

23 Swingle & Co. v. Reynolds, 140 Neb. 693, 695, 1 N.W.2d 307, 309 (1941).

24 See, H & R Block Tax Servs., supra note 1; Presto-X-Company, supra

note 22.

25 H & R Block Tax Servs., supra note 1.

26 Id. at 421, 693 N.W.2d at 556.

27 H & R Block Tax Servs., supra note 1.

28 Id.
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will be no greater than necessary to achieve its legitimate purpose.29 We conclude that it is not.

In order for something to be reasonable in both space and 

time, it must usually have a territorial restriction.30 For example, a covenant restricting a prospective rent-a-car franchisee 

from operating in competition anywhere in the western hemisphere for a period of 2 years has been held unreasonable as 

being a restraint of trade.31 Similarly held unreasonable was the 

covenant of a franchisee of a tax preparation firm, which covenant did not expressly have any territorial restriction placed 

upon it.32

In H & R Block Tax Servs., the noncompete clause restrained 

its franchisees from competing in the business of preparing 

tax returns within 45 miles of the franchise territory for 1 year 

following termination of the franchise contract.33 There, we 

found that such a restriction was reasonable in time and geographic scope because it only prohibited competition for one 

tax season.

Jani-King’s 1-year covenant is quite different from the 

restriction in H & R Block Tax Servs. Jani-King’s 1-year 

restraint prohibited the franchisee from operating a “Competing 

Business” “in any other territory in which a Jani-King franchise operates.” Since Jani-King operates on a multi-state and 

international basis, on continents as far away as Australia, the 

restriction from competing in “any . . . territory in which a 

Jani-King franchise operates” is similar to having no territorial restriction at all. We find that this is unreasonable in geographic scope. And because this 1-year restraint is not severable from the 2-year restraint also presented by this covenant, 

the entire noncompete agreement is unenforceable.

29 Id.

30 See, e.g., Budget Rent-A-Car Corporation of America v. Fein, 342 F.2d 

509 (1965); H & R Block, Inc. v. Lovelace, 208 Kan. 538, 493 P.2d 205 

(1972).

31 Budget Rent-A-Car Corporation of America, supra note 30.

32 H & R Block, Inc., supra note 30.

33 H & R Block Tax Servs., supra note 1.
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Because we find that the noncompete covenant is invalid 

and unenforceable, we affirm the dismissal of Jani-King’s 

breach of contract and tortious interference claims.

VI. CONCLUSION

We affirm the district court’s decision.

Affirmed

Shasta Linen Supply, Inc., appel

Applied Underwriters, Inc., and 

Underwriters Captive Risk As

Company, Inc., appel

___ N.W.2d ___

Filed April 10, 2015. No. S-14-270.

1. Judgments: Jurisdiction. A jurisdictional question that does not involve a factual dispute presents a question of law.

2. Jurisdiction: Appeal and Error. Before reaching the legal issues presented 

for review, it is the duty of an appellate court to determine whether it has 

jurisdiction.

3. Jurisdiction: Final Orders: Appeal and Error. An appellate court has the 

power to determine whether it has jurisdiction over an appeal and to correct 

jurisdictional issues, even though a party’s failure to appeal from a final order 

precludes an appellate court from exercising jurisdiction over the matters decided 

in the order.

4. ____: ____: ____. An appellate court lacks jurisdiction to entertain an appeal 

unless it is from a final order or a judgment.

5. ____: ____: ____. The first step in determining the existence of appellate jurisdiction is to determine whether the lower court’s order was final and appealable.

6. Final Orders: Appeal and Error. Under Neb. Rev. Stat. § 25-1902 (Reissue 

2008), an appellate court may review three types of final orders: (1) an order 

affecting a substantial right in an action that, in effect, determines the action and 

prevents a judgment; (2) an order affecting a substantial right made during a special proceeding; and (3) an order affecting a substantial right made on summary 

application in an action after a judgment is rendered.

7. Injunction: Final Orders: Appeal and Error. A temporary injunction is not a 

final, appealable order.

8. Arbitration and Award. A motion to compel arbitration invokes a special 

proceeding.

9. Injunction: Final Orders: Appeal and Error. A court’s temporary injunction or 

stay that merely preserves the status quo pending a further order is not an order