Oklahoma Non-Compete Law
and 50-State Guide

Every business owner who has trained a salesperson, handed a manager the customer list, or watched a key employee leave for a competitor has asked the same question: can I stop them? In most states the traditional answer is a non-compete agreement, a promise not to work for a competitor or open a competing business for a set time after leaving. Oklahoma is different. It’s one of a handful of states that refuses to enforce ordinary employee non-competes, and the tools that do work here look nothing like the form agreement an out of state parent company might hand you.

This guide covers what Oklahoma law allows under Title 15 of the Oklahoma Statutes, how selling a business or splitting up a partnership changes the rules, what happened to the FTC’s nationwide non-compete ban, and where every other state stands as of October 2026.

Table of Contents

• Non-Compete Agreements in Oklahoma
• Selling a Business or Splitting Up a Partnership
• How Oklahoma Courts Enforce Restrictive Covenants
• How the Other States Compare
• The FTC Rule and What Replaced It
• Protecting Your Business Without a Non-Compete
• Frequently Asked Questions

Non-Compete Agreements in Oklahoma

Oklahoma’s rules come from a short run of statutes in Title 15, the state’s contract code. The starting point, 15 O.S. § 217, voids every contract restraining anyone from exercising a lawful profession, trade, or business, except as the sections that follow allow. Our Oklahoma employment attorneys for employers build restrictive covenant programs around these sections rather than around national templates.

Section 219A: The Employee Rule

Section 219A says that a person who agrees with an employer not to compete after the job ends must still be permitted to engage in the same business. The only restriction it preserves is an agreement not to directly solicit the sale of goods or services from the employer’s established customers, and any conflicting contract term is void. The Oklahoma Supreme Court has applied that language aggressively. In Howard v. Nitro-Lift Technologies (2011), an oilfield services dispute, it declared the employees’ non-competes void as against Oklahoma public policy; the U.S. Supreme Court later vacated that decision on arbitration grounds without disturbing its reading of § 219A. The practical result is blunt: a promise not to work for a competitor, open a competing shop, or work in the industry will not be enforced against an Oklahoma employee, however reasonable the time and territory look.

What “Established Customers” Means

The statute doesn’t define “established customers,” so the courts have. In Bayly, Martin & Fay, Inc. v. Pickard (1989), the Oklahoma Supreme Court adopted a rule of reason and refused to enforce a provision that reached beyond the employer’s established customers. A detailed Oklahoma Bar Journal review of the case law traces how later decisions applied that test.

Two features trip up employers. The statute restricts direct solicitation, not competition, so a former employee who accepts work from a customer who calls on their own is generally not soliciting. And the protected group is narrower than “every customer we have ever had.” Covenants that track the customers the employee actually served are the ones that survive, and Oklahoma courts have upheld customer non-solicitation covenants of two years.

Section 219B: Protecting Your Team From Poaching

From 2011 until 2013, Oklahoma employers could not reliably stop a departing employee from recruiting coworkers; the Howard court treated those clauses as unlawful restraints too. The Legislature responded with § 219B, which provides that an agreement not to solicit the employer’s employees or independent contractors, directly or indirectly, is not a restraint on trade.

Selling a Business or Splitting Up a Partnership

The two statutory exceptions rest on the same logic. An owner who has been paid for goodwill isn’t an employee trying to earn a living, and letting the seller walk across the street with the customers would undo the deal. Our guides to selling a business in Oklahoma and buying a business in Oklahoma show where the covenant fits in the broader deal.

The Sale of Business Exception: Section 218

Under § 218, a seller of goodwill may agree not to carry on a similar business within a specified county and any contiguous counties, or a specified city or town, for as long as the buyer carries on a like business there. If the parties draw the territory too broadly, the statute still allows enforcement in the county where the business was primarily conducted and its contiguous counties. A buyer expecting statewide or national protection won’t get it by contract alone.

The harder question in modern deals is who counts as a seller. Oklahoma courts have applied § 218 to owners who sell an “appreciable” interest, including a 20 percent owner who actively managed the business in Key v. Perkins (1935), and have treated a merger that transfers goodwill as a sale. A tiny equity stake granted to an employee won’t turn an employee non-compete into a sale of business covenant; the Oklahoma Supreme Court has described a 0.8 percent stake as too minuscule to qualify. The issue comes up in asset and stock purchases alike, and whenever rollover equity or an earnout keeps the seller involved after closing.

Our M&A attorneys draft the purchase agreement covenant and the seller’s employment agreement so the protection rests on the right one.

The Partnership Exception: Section 219

Section 219 lets partners agree, upon or in anticipation of dissolution, that none of them will carry on a similar business within the county, contiguous county, or city limits that apply to a sale of goodwill. The statute speaks of partnerships, so owners of LLCs and closely held corporations shouldn’t assume it applies to them. For those businesses, a departing owner’s covenant is usually structured as part of a buyout of the owner’s interest under § 218. That belongs in your operating agreement, shareholder agreement, or buy-sell agreement before anyone leaves, not in the middle of a partner dispute. Our business and corporate law team builds those departure covenants into the governing documents from the start.

How Oklahoma Courts Enforce Restrictive Covenants

Even a covenant Oklahoma allows must be reasonable: no greater than necessary to protect the business, not an undue hardship on the person restrained, and not harmful to the public. Three other issues come up repeatedly.

Courts may narrow, but will not rescue. Oklahoma courts can trim a covenant’s time, territory, or scope when that cures the defect, as Bayly allowed, but they won’t supply missing terms. In Autry v. Acosta, Inc. (2017), the Court of Civil Appeals reversed an injunction because the clause barred indirect as well as direct solicitation, and it declined to save the clause by striking the word “indirectly.” Do not count on a judge converting an outright non-compete into a valid non-solicitation clause.

Arbitration clauses change who decides. After the Oklahoma Supreme Court voided the non-competes in Howard, the U.S. Supreme Court vacated that decision in Nitro-Lift Technologies, L.L.C. v. Howard (2012). When the parties agreed to arbitrate, an arbitrator rather than a court decides in the first instance whether the non-compete is valid.

Forum clauses can blunt Oklahoma policy. Oklahoma will not apply another state’s law that conflicts with a fundamental Oklahoma policy when Oklahoma has the greater interest, and § 219A gives an Oklahoma employee a strong argument. Forum clauses can matter more. In a 2025 case involving an Oklahoma employee of a medical device company, a federal court in Tulsa enforced a clause sending the dispute to Michigan while noting it would likely find the covenant void under Oklahoma law, and the Michigan court then granted the former employer a preliminary injunction.

Trade secret law fills much of the gap. The Oklahoma Uniform Trade Secrets Act and the federal Defend Trade Secrets Act allow injunctions and damages when a former employee misappropriates protected information, whether or not anyone signed a non-compete. They protect only information the company has actually kept secret, which is why access controls and a well drafted confidentiality agreement matter so much in Oklahoma.

How the Other States Compare

Outside the states that ban them, non-competes are judged under state law, and courts start from skepticism. Most enforce a non-compete only if it’s reasonable in duration (one year is the most defensible), limited to the territory where the employer actually does business, and tied to a real interest such as trade secrets or customer goodwill. A 2016 U.S. Treasury report found non-competes common even among lower wage workers with no trade secrets, and the Economic Innovation Group estimates that nearly one in five workers is bound by one. That’s why the law keeps moving.

Recent changes have mostly tightened the rules. Wyoming voided most non-competes for agreements made on or after July 1, 2025. Washington passed a law in March 2026 that voids nearly all non-competes starting June 30, 2027, including existing ones. On July 1, 2026, as Becker’s reported, Tennessee began voiding non-competes for employees earning under $70,000, and Virginia began requiring disclosed severance before enforcing one against an employee fired without cause. Florida moved the other way, making non-competes easier to enforce against high earners in 2025.

Health care is a separate layer. About half the states now limit non-competes for physicians or other health care workers, and at least a dozen states added limits in 2025 or 2026, including Arkansas, Colorado, Indiana, Montana, Oregon, Texas, Utah, and Virginia. Becker’s 50-state physician guide tracks the details.

The FTC Rule and What Replaced It

The Federal Trade Commission’s April 2024 rule banning most non-competes never took effect. A federal court in Texas set it aside in August 2024, the Commission voted in September 2025 to drop its appeals, and on February 12, 2026 it formally removed the rule from the Code of Federal Regulations.

The FTC now challenges non-competes case by case as unfair methods of competition. It acted against a pet cremation company in September 2025, sent warning letters to large health care employers, and in April 2026 reached an order with a national pest control company covering more than 18,000 employees, finalized in June 2026. The pattern, as SHRM’s summary for employers notes, is scrutiny of non-competes required of large numbers of rank and file workers with no access to trade secrets. No federal non-compete bill has passed.

Protecting Your Business Without a Non-Compete

For an Oklahoma employer, alternatives aren’t a backup plan; they are the plan.

• Non-solicitation agreements. Covenants not to solicit customers and coworkers address the real risk in most departures and are enforceable in Oklahoma within the limits of §§ 219A and 219B.
• Confidentiality agreements. A clear definition of what’s confidential, backed by real access controls, is enforceable virtually everywhere. See our guide to structuring NDAs and protecting confidential business information.
• Garden leave. The employee gives advance notice and stays on the payroll, away from the business, so they can’t start with a competitor until the notice period ends.
• Forfeiture for competition. Deferred compensation or equity is conditioned on not competing. Whether an Oklahoma court would treat that as an indirect non-compete under § 219A is an open, fact specific question.
• Retention economics. Vesting, retention bonuses, and equity that rewards staying often work better than any covenant.

If your template is more than a few years old, review it: an agreement written before 2023 predates the Minnesota, Wyoming, and Washington bans and dozens of threshold changes. If you want someone watching these changes year round, our outside general counsel service keeps your agreements current. Our guide to employment agreements for Oklahoma employers covers the rest of the agreement.

Frequently Asked Questions

• Are non-compete agreements enforceable in Oklahoma?

  Not for ordinary employees. Under 15 O.S. § 219A, a former employee must be allowed to work in the same business, and any contrary contract term is void. Oklahoma does enforce agreements not to directly solicit established customers (§ 219A) or recruit employees and contractors (§ 219B), and true non-competes in the sale of a business (§ 218) or a partnership dissolution (§ 219).

• Is a non-solicitation agreement enforceable in Oklahoma?

  Yes, within limits. A customer non-solicitation clause must be limited to direct solicitation of established customers and be reasonable in duration; Oklahoma courts have upheld two year covenants. Agreements not to recruit employees or independent contractors are expressly permitted by § 219B.

• What counts as an “established customer” in Oklahoma?

  The statute doesn’t define it. Courts generally protect ongoing relationships the employee worked with, especially accounts with current contracts or a reasonable expectation of continued business, but not prospects, one time past customers, or the market as a whole.

• Can I require a non-compete when I buy an Oklahoma business?

  Yes. Section 218 allows a seller of goodwill to agree not to compete within specified counties and their contiguous counties, or a specified city or town, for as long as the buyer carries on a like business there. Courts have applied it to owners who sell an appreciable interest, not just sellers of an entire company.

• Can business partners agree not to compete after the partnership ends?

  Yes. Section 219 allows partners, upon or in anticipation of dissolution, to agree not to compete within the county, contiguous county, or city limits that apply to a sale of goodwill. Owners of LLCs and corporations usually rely on a buyout of the departing owner’s interest under § 218 instead.

• Can an employer use another state’s law against an Oklahoma employee?

  It’s difficult, because Oklahoma will not apply a chosen law that conflicts with its fundamental policy in § 219A. A forum clause sending disputes to another state can be more effective, at least at the preliminary injunction stage, as a 2025 case transferred from Tulsa to Michigan showed.

• What if the agreement includes an arbitration clause?

  The arbitrator, not a court, generally decides whether the non-compete is valid. The U.S. Supreme Court reached that result in an Oklahoma case, Nitro-Lift Technologies v. Howard (2012).

• Did the FTC’s non-compete ban go into effect?

  No. A federal court set the rule aside in 2024 before it took effect, the FTC dropped its appeals in September 2025, and it removed the rule from the Code of Federal Regulations in February 2026. The FTC still challenges broad non-compete programs case by case.

• Which states ban non-competes?

  California, Minnesota, North Dakota, and Oklahoma void employee non-competes, and Wyoming voids most of them for agreements made on or after July 1, 2025. Washington’s near total ban takes effect June 30, 2027. Many others, including Colorado, Illinois, Oregon, Tennessee, Virginia, and D.C., ban them below an income threshold.

• We are hiring someone who signed a non-compete with a competitor. What should we do?

  Have the agreement reviewed before you make an offer. The governing law, the forum, and any confidentiality or solicitation terms can be enforceable even when the ban on competing isn’t, and your company can share the exposure if the new hire brings a former employer’s files or customer lists. That review is a good point to involve employment counsel.

Building Protection That Holds Up

The businesses that get burned are usually relying on a template written for another state. For related planning, see our guides to trade secrets and departing employees and hiring independent contractors.

Disclaimer: This article provides general information about non-compete and other restrictive covenant law and is not legal advice. The state summary reflects the law as of October 2026; state laws, salary thresholds, and court decisions change frequently, and many states have additional rules for particular industries. Every situation turns on its own facts. For guidance on your specific situation, consult qualified counsel licensed in the relevant state.

About Cantrell Law Firm: We are Oklahoma business attorneys and former entrepreneurs who help employers and business owners protect their customer relationships, teams, and confidential information. Learn more about our labor and employment practice. Contact us to discuss your restrictive covenants.