Before examining the reasonableness of a noncompetition agreement, courts first consider whether the agreement is ancillary, meaning connected and subordinate to another valid contract. If there is no such contract, the court will look to see if there was valid consideration to enforce such an agreement. If there is no adequate or independent consideration present, most courts will refuse to enforce such an agreement. This is to ensure that the noncompetition agreement is not an outright restraint on trade but, rather, the result of a bargained-for exchange that furthers legitimate commercial interests.
When a businessman sells his business, the purchaser may compete with him unless there is a valid restrictive covenant or covenant not to compete. The same is true when an employee leaves the employment of a company and begins soliciting customers of his former employer or competing with his employer in a similar way. When an ongoing business is sold, it is commonly stated in the sales contract that the seller shall not go into the same area or begin a similar business within a certain geographical area or for a certain period of time or both. Such an agreement can be valid and enforceable.
Restrictions to prevent competition by a former employee are held valid when they are reasonable and necessary to protect the interests of the employer. Courts will closely examine covenants not to compete signed by individuals in order to make sure that they are not unreasonable as to time or geographical area.
When a restriction of competition is invalid because it is too long or covers too great a geographical area, Courts will generally do one of two things. Some Courts will trim the restrictive covenant down to a period of time or geographical area that the Court deems reasonable. Other Courts will refuse to enforce the restrictive covenant at all and declare it void.
Caution: Statutory law in a few states completely prohibit covenants not to compete unless the covenant meets the state's statutory guidelines.
Oklahoma General Non-Competition Agreement, also known as a Non-Compete Agreement or a Covenant Not to Compete, is a legally binding contract commonly used in business settings to protect employers' proprietary information, trade secrets, and mitigate potential harm caused by employees who may leave their current job and directly compete with the employer's business. This agreement is applicable in the state of Oklahoma and outlines the terms and conditions under which an employee or independent contractor agrees not to engage in activities that directly compete with the employer's business for a specific duration, often after the termination of their employment or contractual relationship. The Oklahoma General Non-Competition Agreement aims to prevent employees or contractors from utilizing or sharing the employer's trade secrets, customer lists, confidential information, proprietary technologies, or other valuable assets in a manner that could harm the employer's business interests. By signing this agreement, the employee or contractor acknowledges that they have received access to confidential information during their tenure and agrees to refrain from using that knowledge for competitive purposes. It is important to note that there might be variations or different types of Oklahoma General Non-Competition Agreements depending on the industry, company, and nature of work involved. Some variations may include: 1. Employee Non-Compete Agreement: This agreement is used when an employer wants to prohibit an employee from joining or starting a similar business within a certain geographical area after their employment ends. 2. Contractor Non-Compete Agreement: This type of agreement is utilized when a company contracts with an independent contractor or consultant who gains access to proprietary information and the company wants to maintain exclusivity and prevent potential competition from the contractor. 3. Sale of Business Non-Compete Agreement: In cases where a business is being sold, the current owner may require the buyer to sign a non-compete agreement, preventing them from establishing a similar business within a specific timeframe in the same market. 4. Partnership Non-Competition Agreement: In situations involving business partnerships, this agreement may be used to prevent partners from competing with each other or establishing rival businesses during or after the partnership ends. It is crucial for employers and employees or contractors to carefully review and negotiate the terms of an Oklahoma General Non-Competition Agreement to ensure that it is reasonable, enforceable, and compliant with the laws of the state. Seeking legal counsel during drafting or signing of such agreements is advisable to protect all parties involved.
