Misunderstanding surrounds noncompete agreements
Last Updated on Sunday, 27 August 2023 03:15 Written by Chris Griswold Monday, 6 July 2015 01:56
I sat down with Paula Burkes from The Oklahoman to answer a few questions regarding noncompete agreements.
Q: What isn’t allowed in noncompete agreements?
A: Employers can’t prevent a departing employee from continuing to do what they do within so many miles of the previous employer, nor can previous employers prevent employees from carte blanche working their trade for a certain period of time after their departure.
Q: What is allowed?
A: Prohibiting employees from directly engaging and soliciting existing customers of the employer after they leave that employer. The Oklahoma statute reads: “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 … 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.”
Q: What do employers most often misunderstand about noncompetes?
A: Employers often write into their noncompetes that the employee can’t solicit business from existing customers of the employer for one, two or three years. This time element isn’t a requirement that must be addressed in the noncompete. If an employer wants to provide for one, that’s kind of the employer, but not required to make the noncompete enforceable. Just know that a court is hesitant to agree to enforce your noncompete for an indefinite period of time (and reasonably so).
Q: What is something employers could do to further help with the enforceability of their noncompetes?
A: For starters, quit calling them “noncompetes” in their employment agreements. Use verbiage that more aligns with the statutory protections, such as “No Direct Solicitation of the Established Customers of the Employer After Termination of Employment.”
