Florida employers looking to tap into Oklahoma’s talent pool should know the nuances of Oklahoma’s noncompete and non-solicitation laws as these laws significantly differ from Florida's. This post addresses each of these laws, what they mean, and provides two key strategies that Florida employers can consider to help protect their business interests.
Oklahoma Law on Employee Noncompetes: Generally Restricted
Unlike Florida's generally permissible legal stance on employee noncompete agreements, Oklahoma takes a stricter approach, deeming any agreement that restricts an Oklahoma resident from exercising a lawful professional, trade or business as void, subject to a few exceptions. Okla. Stat. tit. 15 § 217 (“Every contract by which any one is restrained from exercising a lawful profession, trade or business of any kind, otherwise than as provided by Sections 218 [exception to the sale of goodwill of a business] and 219 [exception to partners of dissolving partnership] of this title [] … is to that extent void.").
Specifically:
“A person who makes an agreement with an employer, whether in writing or verbally, not to compete with the employer after the employment relationship has been terminated, shall be permitted to engage in the same business as that conducted by the former employer or in a similar business as that conducted by the former employer….Any provision in a contract between an employer and an employee in conflict with the provisions of this section shall be void and unenforceable.”
Okla. Stat. tit. 15 § 219A (A) & (B) (emphasis added).
Stated differently, Oklahoma law expressly grants former employees with an affirmative right to compete with their former employers, and any agreement attempting to restrict this right is void and unenforceable. E.g., TruGreen Ltd. v. Okla. Landscape, Inc., 526 F. Supp. 3d 1080, 1089 (N.D. Okla. 2021) (non-compete restricting former employee from directly or indirectly working or otherwise becoming involved in any capacity in any company that competes with TruGreen’s business held void and unenforceable ); Howard v. Nitro–Lift Techs., L.L.C., 273 P.3d 20, 23 (Okla. 2012) (non-compete containing a 2 year post-termination restriction that prohibited, in part, the former employee from working for any competitive oil and gas entity located anywhere in the United States held void and unenforceable).
Oklahoma Law on Non-Solicitation: Less Restrictive
While Oklahoma law prohibits employee non-compete agreements, the laws on non-solicitation of company employees, independent contractors, and customers are less restrictive.
Employee and Independent Contractor Non-Solicitation: Generally Permitted
Oklahoma generally permits reasonable restrictions on the solicitation of a company’s employees and independent contractors, providing that:
"A contract or contractual provision which prohibits an employee or independent contractor of a person or business from soliciting, directly or indirectly, actively or inactively, the employees or independent contractors of that person or business to become employees or independent contractors of another person or business shall not be construed as a restraint from exercising a lawful profession, trade or business of any kind. Sections 217, 218, 219 and 219A of Title 15 of the Oklahoma Statutes shall not apply to such contracts or contractual provisions."
Okla. Stat. tit. 15 § 219B (emphasis added).
Breaking this down:
Agreements restricting the solicitation of company employees and independent contractors are generally exempt from Oklahoma’s prohibition on restraints of trade.
Employers can restrict former employees and independent contractors from soliciting the company’s employees and independent contractors.
The non-solicitation terms can prohibit direct, active solicitation (e.g., contact via email, text message, a phone call or in person) and indirect, passive solicitation (e.g., posts on social media about a new job opportunity targeted to a former employer’s employees or independent contractors).
Customer Non-Solicitation: Limited Protection
In addition to allowing post-termination agreements that prohibit the solicitation of a company's employees and independent contractors, Oklahoma law allows employers to restrict former employees from soliciting their established customers for the sale of competitive goods and/or services.
Specifically:
“A person who makes an agreement with an employer, whether in writing or verbally, not to compete with the employer after the employment relationship has been terminated, shall be permitted to engage in the same business as that conducted by the former employer or in a similar business as that conducted by the former employer as long as the former employee does not directly solicit the sale of goods, services or a combination of goods and services from the established customers of the former employer.”
Okla. Stat. tit. 15 § 219A (emphasis added).
The key here is that the restriction must be narrowly tailored to cover “direct solicitation” from “established customers” to align with Section 219A quoted above. Including any broader restrictions, such as “prospective customers”, “past customers”, “future customers”, “any customers” or “indirect solicitation,” exceed the permissible limitations of Section 219A and, therefore, are void and unenforceable. E.g., TruGreen Ltd. v. Okla. Landscape, Inc., 526 F. Supp. 3d 1080, 1089-1090 (N.D. Okla. 2021) (non-compete restricting former employee from indirectly soliciting or contacting in any manner any customer with whom the employee had actual contact while employed by TruGreen imposed broader restrictions that those permitted in Section 219A); Bayly, Martin & Fay, Inc. v. Pickard, 780 P.2d 1168, 1175, 1989 OK 122 (Okla. 1989) (reiterating that Section 219A protects direct solicitation of established customers only).
Two Key Strategies for Florida Employers
When hiring Oklahoma residents for remote work, Florida employers can consider the following two key approaches to protect their business interests against unfair competition post-termination.
One, use non-solicitation clauses or stand-alone non-solicitation agreements to restrict former employees and independent contractors: (a) from directly soliciting the company’s existing customers whose relationships were developed, managed or otherwise regularly handled by the former employees or independent contractors; and/or, (b) from directly or indirectly, actively or inactively, soliciting the company’s employees and independent contractors to work for the former employee or another person or business. The goal here is ensuring the terms are tailored to align with the permissible limitations provided in Section 219A and Section 219B and are reasonable in time, scope of activities, and geography.
Two, leverage strategically written confidentiality clauses or stand-alone confidentiality agreements to protect the company’s confidential information against disclosure and use. The categories of confidential information should include the company's valuable confidential information, such as trade secrets, know-how, proprietary information, customer lists, business plans, pricing strategies, operating costs, profit margins, market data, and financial information. Avoid including information that arises out of the general skills or knowledge that an employee or independent contractor naturally acquires during the course of their work as this type of information is not considered a company's confidential information.
Closing Remarks
The landscape of remote work has transformed dramatically across the American workplace, with the COVID-19 pandemic serving as a catalyst for widespread adoption. As Florida companies expand their talent searches beyond state lines, this interstate hiring brings unique challenges, particularly regarding post-employment restrictions. For Florida employers hiring Oklahoma residents, understanding Oklahoma's specific approach to non-competition and non-solicitation agreements is essential for crafting enforceable terms. Success in protecting business interests while hiring Oklahoma talent requires a strategic approach, such as using strategically tailored confidentiality provisions, using carefully structured non-solicitation terms that align with Oklahoma law, and recognizing the limitations on non-compete restrictions. By taking these measured steps, Florida employers can both tap into Oklahoma’s talent pool and maintain appropriate safeguards for their business interests.
The information provided is for general informational purposes only and not intended as legal advice or opinion for any individual matter. Legal development or changes in law or regulations may in the future and the content here may not be the most up-to-date legal or other information at the time of reading. You should consult your own attorney for any legal advice you may require.
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