Oklahoma Business Owner’s Guide to Non-Competition Agreements
When you own a business, it’s natural to want to do everything legally within your power to protect your interests. The problem is that you may become vulnerable when it comes to your employees. Hiring, training, and developing your team exposes them to valuable assets in the form of information, such as trade secrets, customer contacts, and other intellectual property; if they use this information when they leave your company, the implications can be devastating to your business.
You may be familiar with non-competition agreements as a way of safeguarding your interests, but there are some pitfalls involved with these clauses under Oklahoma law. This general overview may help, but you should discuss the details with an experienced business transactions attorney as well.
Oklahoma’s Statute on Restrictive Covenants
State law is very specific and strict on what types of non-competition agreements are lawful. An employee may engage in the same or similar business of a former employer after the employment relationship is terminated, regardless of a written or verbal agreement to the contrary.
The only exception is that a former worker cannot directly solicit established customers of the former employer for goods or services. Any agreement that runs contrary to the statutory provisions is void and unenforceable.
Supreme Court of Oklahoma Decision
While this law may seem harsh for business owners, it has actually addressed – and upheld – by the state’s highest court recently. In the 2011 case of Howard v. Nitro-Lift Technologies, LLC, the Supreme Court of Oklahoma found that the unmistakable language of the statute prohibits employers from binding former employees to contracts that prevent them from finding employment. Business owners can only restrict workers from contacting customers where the relationship is established, ongoing, and expected to continue.
Protect Your Business
A close look at the court decision and statutory law reveals that there are still ways to safeguard your interests. Put the agreement in writing, and include a carefully crafted definition of the term “established customers” to prevent solicitation. Plus, you should include the statutory language as much as possible, as the Supreme Court relied heavily on these words in its 2011 finding.
An Oklahoma Business Transactions Attorney Can Help
To avoid any of the pitfalls with noncompetition agreements, you should consult with a lawyer that has extensive knowledge about state law on these clauses. At the Law Offices of Robert R. Robles in Oklahoma City, OK, our attorneys have the experience and skills necessary to protect your business. For more information, please contact our office at (405) 232-7980 or visit us online.