In Oklahoma is continued employment enough to make a binding contract?

If an Oklahoma employer presents a new contract to an employee and tells the employee that he or she must sign the contract to keep their job, is the contract enforceable?

Answer:  Probably Not.

I talked about what consideration is in a contract in this blog post.  The question for this post is whether an Oklahoma employer can enforce a non-compete covenant against a former employee when the only consideration provided to the employee for agreeing to the covenant is continued employment? In other words, “sign the agreement or you will lose your job.”

And I can definitively tell you that . . . I don’t know.  From my research, Oklahoma courts have not decided this issue. While this issue has been resolved in several other states, I am not aware of any Oklahoma court decision or statute which definitively resolves this issue (this federal court case discusses the question but does not provide an answer). However, there are several decisions which suggest that the court would not consider continued employment as sufficient consideration to support a non-compete covenant.

In one of Oklahoma’s older employment law cases, Hinson v. Cameron, the Oklahoma Supreme Court recognized that one of the five critical factors in determining whether a particular set of facts may imply a contract restricting or limiting an employer’s discretion to discharge an at-will employee, was  “evidence of ‘separate consideration,’ other than the employee’s continued services, to support the implied contract . . .”

My prediction

While it is difficult to predict what any court will decide, it seems there is a decent chance considering Oklahoma’s strong public policy opposition to non-compete covenants, that if faced with the question, an Oklahoma would find that continued employment, by itself, is not sufficient consideration.
 
 
The moral of this story? Employers: Do not rely on continued employment to support a contract, get something more.
 
 
 

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."