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Two Scenarios When Your Oklahoma Non-Compete Agreement Might Be Enforceable

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In my last post, I told you that Oklahoma has made a public policy decision to invalidate non-compete agreements which prevent employees from competing with their former employers. However, Oklahoma law carves out two (2) narrow exceptions to the general rule that Oklahoma non-compete agreements are void and unenforceable. In that regard, Oklahoma non-compete agreements should be valid and enforceable under the following circumstances:

  1. When you sell the goodwill of a business. Section 218 of Title 15 of the Oklahoma statutes allows a non-compete agreement between a seller and buyer of a business, which includes the sale of the goodwill of the business. The seller may agree with the buyer to refrain from carrying on a similar business within a specified county and any county or counties contiguous thereto, or a specified city or town or any part thereof. In Oklahoma, the goodwill of a business is defined as the “expectation of continued public patronage; it is the value that results from the probability that old customers will continue to trade with an established concern.”
  1. When a business with multiple owners or partners split-up. Section 219 of Title 15 of the Oklahoma statutes allows a non-compete agreement when a business with multiple owners or partners dissolves.  Partners, upon or in anticipation of a dissolution of the partnership, may agree that none of them will carry on a similar business within a specified county and any county or counties contiguous thereto, or a specified city or town or any part thereof.

If you are a business owner selling your business, or if you and your business partner are splitting up, and you need help drafting a non-compete agreement, or determining whether your existing non-compete agreement is valid and enforceable, then then please feel free to call me at (405) 235-6500.

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