Enforceability of employee nonsolicitation agreements confirmed

Oklahoma Governor Mary Fallin recently signed a bill into law that confirms Oklahoma employers’ right to enforce agreements prohibiting a current or former employee from soliciting the company’s employees to leave their jobs to work for another employer. McAfee & Taft labor and employment attorney Natalie Ramsey was featured in Business Q&A in The Oklahoman discussing its effect.

“For some time, many Oklahoma employers have contractually prohibited the solicitation of employees for a reasonable period of time after the former employee has left their employment,” Ramsey told The Oklahoman. “Senate Bill 1031 confirms and reinforces this prohibition by codifying that a contractual 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 law has no effect on noncompetition agreements, which generally remain unenforceable under Oklahoma state law, she said.

“While employers cannot prohibit employees from competing in the same or similar business after they leave their company, they can prohibit them from directly or indirectly soliciting their employees and independent contractors and from directly soliciting their established customers. A well-crafted agreement supported by adequate consideration can address these issues.”

The new law takes effect Nov. 1. Any employee nonsolicitation agreement signed on or after that date falls under the new law.

“Out of an abundance of caution, employers who have existing employee nonsolicitation agreements in place should consider requiring employees sign a new nonsolicitation agreement after Nov. 1 and provide appropriate consideration to the signing employee to support those new agreements,” Ramsey said.