Having a non-compete agreement is common in employment contracts and business sales, but their enforceability varies widely by state. In Oklahoma, the law places strict limits on non-compete clauses, especially in the employer-employee context. Whether you’re a business owner or a former employee, it’s important to understand what Oklahoma law does and doesn’t allow.
Oklahoma’s General Stance on Non-Compete Agreements
Under Title 15, Section 219A of the Oklahoma Statutes, non-compete agreements are largely unenforceable when used to restrict a former employee’s ability to work for a competitor. The statute reflects Oklahoma’s public policy favoring free trade and employee mobility.
Specifically, the law states that an employer may not prevent an employee from engaging in the same business or profession after leaving employment, provided they are not using the former employer’s trade secrets.
What Employers Can Restrict Instead
While Oklahoma prohibits blanket non-compete agreements, it does allow limited restrictions designed to protect a company’s legitimate business interests. These include:
- Non-solicitation of clients: An employer may prohibit a former employee from directly soliciting existing customers with whom they had a business relationship while employed.
- Non-solicitation of employees: An agreement may restrict a former employee from hiring away current staff for a certain period.
- Protection of trade secrets: Employers can still enforce agreements that prevent former employees from using confidential information or proprietary data obtained on the job.
These restrictions must be reasonable in scope and duration, and cannot function as a disguised non-compete.
Non-Competes in the Sale of a Business
Non-compete clauses are more likely to be enforceable when they arise in the context of a business sale. For example, if a business owner sells their company and agrees not to compete with the buyer within a defined region and time frame, Oklahoma courts generally uphold that type of agreement—provided the terms are reasonable.
The logic here is that the seller is receiving compensation for agreeing to limit competition and there are no unfair restrictions on them from earning a living.
Are There Exceptions?
Even in the employer-employee context, Oklahoma courts may enforce certain restrictions if:
- The employee was in a high-level, executive position
- The agreement is narrowly tailored
- It focuses on protecting trade secrets rather than limiting competition itself
However, courts are likely to strike down overly broad or vague agreements.
Claremore Business Law Attorneys
In Oklahoma, the enforceability of a non-compete agreement depends heavily on the context. Employees generally cannot be barred from competing once they leave a job, but employers can still protect their business with narrowly tailored agreements that focus on non-solicitation and confidentiality. For a free consultation with an attorney at Kania Law – Claremore attorneys’ law office, call 918-379-4872. Or you can click here to ask a free online legal question.
