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Oklahoma Non-Compete Agreement Template

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Oklahoma Non-Compete Agreement Template

Updated July 29, 2022

An Oklahoma non-compete agreement is not allowed for the use of restricting a former employee from working in the same business as the employer. In Oklahoma, any contract that puts a “restrain” on an individual is to that extent void.

Although, a non-compete is legal for use when purchasing a business (to protect the buyer) and for partners in a dissolving entity. Must be limited by a specific time period and territory.

Legally Enforceable?

  • Employees: No, for employment purposes a non-compete is prohibited in Oklahoma. (Okla. Stat. tit. 15 § 217)
  • Transfer of a Business (“goodwill”): Yes, a non-compete is legal against a seller of a business from working in the same industry for the areas served by the selling entity. (Okla. Stat. tit. 15 § 218)
  • Partnership Dissolution: Yes, a non-compete is legal for the partners in a dissolving partnership from starting or participating in the same business by the entity. (Okla. Stat. tit. 15 § 219)

Statute (employment)

Every contract by which any one is restrained from exercising a lawful profession, trade or business of any kind, otherwise than as provided by Sections 218 and 219 of this title, or otherwise than as provided by Section 2 of this act, is to that extent void.

Maximum Term

5 years have been deemed reasonable by the Oklahoma Supreme Court.

Source: Wall v. Chapman (1921)

Geographical Area

A non-compete should only cover counties, cities, and towns the business or partnership serves. The geographical area should not be overbroad and will be deemed unreasonable if it expands beyond where the business serves.

Source: Eakle v. Grinnell Corp. (2003)

Blue Penciling

An Oklahoma court may strike out portions of an agreement to make it enforceable under State law. (Cardiovascular Surgical Specialists, Corp. v. Mammana (2002)

Although, the court will not amend an agreement “if the essential elements of the contract must be supplied.” (Cohen Realty, Inc. v. Marinick (1991))

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