McAfee & Taft Employer LINC: Oklahoma passes law confirming enforceability of employee non-solicitation agreements

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While non-competition agreements remain unenforceable under Oklahoma law, a bill recently signed by Governor workers-comp-overhaulFallin confirms by a new statute that Oklahoma employers may enforce agreements prohibiting a former employee from soliciting a company’s employees to leave their jobs to work for another employer.

For some time, Oklahoma employers have contractually prohibited the solicitation of employees for a reasonable period of time after the former employee has left their employment. Senate Bill 1031 confirms and reinforces this well-recognized and long-observed prohibition by codifying that a contract provision that prohibits an employee or independent contractor from directly or indirectly soliciting employees or contractors to become employees for another organization is not an unlawful restraint of trade.

The new statute expressly states that contracts which restrict a former employee from soliciting employees do not violate Oklahoma law prohibiting the enforcement of non-competition clauses. It should be noted that Oklahoma employers continue to have the right to prohibit current and former employees from soliciting a company’s established customers.

Next steps for employers

Senate Bill 1031 goes into effect November 1, 2013; thus, any employee non-solicitation agreements signed after that date will be enforceable under the new statute. Out of an abundance of caution, employers should consider requiring employees to sign new non-solicitation agreements post-November 1, but you should make sure that appropriate consideration is provided to the signing employee to support any new agreements.

 

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DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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