How does an Oklahoma employer protect its private property when an employee leaves?

Hoodoos Of Bryce Canyon

While Oklahoma is broadly opposed to non-compete agreements, it provides several devices for Oklahoma employers to protect their private property that gives the business its competitive edge, when employees leave.  

Movement is positive

Employee movement from job to job or from job to business start-up is natural and healthy.  The owners of many Oklahoma businesses were once employees of an Oklahoma business, who left to start their own business. What is not natural or healthy, is employees who leave a business to work for a competitor and take the former employer’s private property.  The property, for our purposes, is data, handbooks, formulas, strategies, pricing and, perhaps a bit surprising, customers.

Private Property worth Protecting

The property encompasses the universe of tangible items that make one business distinct from another business.  To protect this property, Oklahoma law allows an employer and an employee to agree that when the employee leaves employment, the employee will not use certain property of an employer.  One type of property is tremendously important:  Customers.

While I understand that people are not “property”, in this context established customers of a business are an asset and can be properly classified as a type of “property” an employer can protect.

The tool available to Oklahoma Employers

The tool that is most often used by employers to protect against a former employee taking customers away is a non-solicitation restriction.  A non-solicitation restriction is indeed what it sounds like – a promise by an employee to not solicit the employer’s established customers after the employee leaves employment and either joins a competing company or starts the employee’s own competing company.

What does it look like?

An Oklahoma non-solicitation restriction in an employment contract would look something like this:

7.2 For a period of one (1) year after termination of Employee’s employment with Company, Employee shall not directly, or indirectly knowingly solicit any of the accounts, clients, or contractors of Company that were directly or indirectly serviced by Employee while an employee of Company.

Oklahoma law typically requires the time period for the non-solicitation restriction to be “reasonable” a term that has interpreted by Oklahoma courts to run somewhere between 1 and 3 years.

One last point . . .

One more thing to keep in mind:     
  The customer is almost always allowed to choose whatever business or person it wants to work with.  
    A non-solicitation restriction does not restrict what the customer can do, it restricts an employee’s interactions with customers when the employee leaves the business.

 

 

Posted by Shawn Roberts

On this blog, I write about and try to answer practical Oklahoma legal questions. My focus and most experience is in estate planning and business issues including Oklahoma non-compete law. I make a living as an attorney in the law firm I founded, Cazes Roberts, PLLC in Oklahoma City. I live in Edmond with wife Amy and my two children, Sam (17) and David (9). We live precisely in the path of where the "wind comes sweeping down the plains."