Thanks, I have fixed the problem with the following code:

#!/usr/bin/perl -w
use strict;
use warnings;
use Crypt::Tea;

if (@ARGV != 3)
{
        print STDERR "Usage: $0 [-d|-e] [FILENAME] [KEY] \n";
        exit 1;
}

if (($ARGV[0] ne '-d') && ($ARGV[0] ne '-e'))
{
        print "Specify '-d' to decrypt or '-e' to encrypt\n";
  exit 1;
}

my ($action, $file, $key) = @ARGV;

my $input;
{
  open (my $fh, '<', $file) or die $!;
  binmode($fh);
  local $/;
  $input = <$fh>;
}
if ($action eq '-e')
{
  print encrypt($input,$key);
}

if ($action eq '-d')
{
  print decrypt($input,$key);
}
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Can someone explain the "my $input; { ... }" part. I am unfamiliar with this type of code. Is this shorthand for a function?