Q: Is it legal in Oklahoma to require my employees to sign a covenant not to compete, if they quit or are fired?
A: As a general rule, in Oklahoma, contracts that restrain a person from exercising a lawful profession, trade or business are prohibited, except as otherwise provided in Oklahoma statutes. Oklahoma does have a statute allowing a contract between an employer and employee that includes a covenant not to compete after the employment relationship is over. However, the statute provides the employee “shall be permitted to engage in the same business as that conducted by the former employer or in a similar 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 are the negatives associated with this statue?