Non-Compete Agreements in Oklahoma: Statutory Prohibition

Oklahoma's Non-Compete Ban

Oklahoma broadly prohibits non-compete agreements. 25 O.S. Section 219 declares that a person who makes a contract by which they are restrained from exercising a lawful profession, trade, or business is void. Along with California and North Dakota, Oklahoma is one of the most restrictive states for non-competes.

The Scope of the Prohibition

The statute invalidates any agreement that prevents a person from engaging in their profession after leaving employment. Oklahoma courts have interpreted this broadly, striking down non-competes regardless of:

• How narrowly drawn the restriction may be
• Whether the employee had access to trade secrets
• The duration or geographic scope
• The amount of consideration provided

The Oklahoma Supreme Court in Bayly, Martin & Fay, Inc. v. Pete (1980) and subsequent cases has reinforced this prohibition.

What Employers Can Still Do

While non-competes are void, Oklahoma law does permit:

• Non-disclosure agreements: Employers may restrict the use or disclosure of trade secrets and confidential information under both contract law and the Oklahoma Uniform Trade Secrets Act (78 O.S. Section 85 et seq.)
• Non-solicitation of established customers: Under 15 O.S. Section 219A, an employer may restrict a former employee from directly soliciting the established customers of the employer using the employer's trade secrets or confidential information
• Sale of business non-competes: Restrictions tied to the sale of a business or its goodwill are permissible

The Direct Solicitation Carve-Out

Oklahoma's 15 O.S. Section 219A creates a narrow exception allowing restrictions on directly soliciting established customers, but only when using the employer's trade secrets or confidential information. General solicitation restrictions that go beyond this narrow scope are likely void.

Red Flags

• Any clause restricting competitive employment in Oklahoma
• Broad non-solicitation clauses that effectively function as non-competes
• Choice-of-law provisions designed to apply another state's law to Oklahoma employees
• Employer threatening enforcement of a non-compete against an Oklahoma employee

When to Consult a Lawyer

Consider consulting an Oklahoma attorney if your employer is attempting to enforce a non-compete, if you are unsure whether your agreement qualifies as a permissible non-solicitation or a prohibited non-compete, or if your contract includes a choice-of-law clause specifying another state.

This article is for informational purposes only and does not constitute legal advice. Consult a licensed attorney for guidance specific to your situation.