The tools an Oklahoma Employer can use to protect itself when employees leave

From Flickr user Alan Levine

If you have read my blog even a little bit, you are probably aware that pure non-compete agreements are not allowed by Oklahoma except in two limited situations (see this post for the exceptions).

A pure non-compete is one that restricts an employee from working in their chosen field or industry.

While Oklahoma has decided it will generally not do non-competes, it doesn’t ignore the legitimate needs of Oklahoma employers to protect their companies. Oklahoma law provides employers several mechanisms to request employees agree to reasonable limits on how they can use what they learn and see when they move on to a new employer.  These are tools all Oklahoma employers need to utilize as reasonable, value-protecting methods to protect what makes a company unique and provides an advantage over the competitions:

Non-Solicitation of Customers
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. A non-solicitation restriction in an employment contract would look something like this:

7.2 For a period of one (1) year after cessation 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.

Non-Solicitation of Employees
While the non-solicitation restriction discussed above relates to customers, there is also another non-solicitation restrictions that relate to employees. Customers are the lifeblood of a business and employees are a component of operating a business that serves customers well, convincing customers to stay customers.

When an employee departs either to a new employer or starts her own company, there is usually a temptation to ask other employees to join her. There is nothing mysterious or sinister about this – people find other people to work with through relationships. The former employee often finds people to hire by talking to people she used to work with.

While this is natural, Oklahoma law allows an employer to ask an employee to agree to not use those relationships with other employees to take the employees away from the employer. This is accomplished with a non-solicitation of employees restriction that often reads like this:

7.1 For a period of one (1) year after cessation of Employee’s employment with Company, Employee shall not directly or indirectly solicit the employment of, or hire any person employed by Company as of the cessation of Employee’s employment with Company, or cause any person employed by Company to terminate such employee’s relationship with Company without the prior written approval of Company.

From Flickr User Kim Siever

Non-Disclosure of Information
Again, Oklahoma non-disclosure restrictions (sometimes confusingly referred as “confidentiality”) is what it purports to be: A restriction that prevents a former employee from sharing the private and proprietary information of the former employer.

Non-disclosure provisions are a critical component in an employment agreement because the non-disclosure provision establishes that the employer has a basic expectation that its private business information must be protected. Non-disclosure restrictions typically look something like the blurb below:

6.1 Confidential Information. “Confidential Information” means proprietary business information, Trade secrets and/or confidential Information regarding the business of Company or its clients. The confidential information is to include Company’s legal, financial, methods of operations, software developments, submission and proposal procedures, client lists, or any other information pertaining to the business of Company. Employee acknowledges and agrees that the business and good will of Company depends upon the protection of any adherence to the keeping of Confidential information confidential.

6.2 Non-Disclosure. Except when directed in writing to do otherwise by Company, and except as required by law, court order, or subpoena, Employee shall keep confidential and shall not divulge to any other person or entity, during the time of the agreement any confidential information. In any case where Employee is compelled by law, court order, or subpoena to disclose any confidential information to a third party, Employee shall advise Company in advance of such requirement and shall permit Company to object, contest, intervene, and/or obtain appropriate protection of such information prior to disclosure to any person unless commanded by law officials or advised against doing so by legal counsel representing Employee.

The Takeaway for Employers

The takeaway is, Oklahoma employers, know the legitimate legal tools you can use to protect your business when employees leave and use them.

Postscript

When I first considered this blog post I thought it might be titled “How an Oklahoma employer can weaponize to protect itself from departing employees”. However, those words do not convey the intent of this post. My intent is to share some mechanisms employers can use to protect their business from employees who might choose to not compete fairly after leaving.

Posted by Shawn Roberts

I write about and try to answer practical Oklahoma legal questions. I tend to focus on estate planning and business issues. I make a living as an attorney working for Resolution Legal Group in Oklahoma City. I am husband to Amy and the father of Sam and David. We live exactly in the path where the "wind comes sweeping down the plains."