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Lane
Lane, JD, CFP, MBA, CRPS
Category: Tax
Satisfied Customers: 12691
Experience:  Law Degree, specialization in Tax Law and Corporate Law, CFP and MBA, Providing Financial & Tax advice since 1986
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Can a Real Estate Broker have a no compete clause in a

Customer Question

Can a Real Estate Broker have a no compete clause in a business sale
Submitted: 1 year ago.
Category: Tax
Customer: replied 1 year ago.
this is an agreement for sale of units. Part II Units Covenant Not to solicit or compete. a,b,c and d
Customer: replied 1 year ago.
Posted by JustAnswer at customer's request) Hello. I would like to request the following Expert Service(s) from you: Live Phone Call. Let me know if you need more information, or send me the service offer(s) so we can proceed.
Expert:  Lane replied 1 year ago.

Hi,

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That's state law issue. For example a Connecticut court ruled that a noncompete clause in a brokerage’s contract wasn’t enforceable because the salesperson’s move to another company didn’t unfairly harm the brokerage (Connecticut Superior Court, 2004; Century 21 Access America v. Garcia)

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So it's a completely settled issue in CT

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In Century 21 v. Lambert, the agent had a non-compete agreement which provided that she would “refrain from carrying on or engaging in the Real Estate Marketing, brokerage, sale or similar business to that performed by [Century 21] and also from soliciting customers of the broker within the parishes of Orleans, Jefferson, St. Charles, St. Tammany, St. Bernard and Plaquemines for a period of two years from the date [she] leaves the Broker’s company. This clause shall survive termination of this agreement and prohibits the engagement by [Lambert] in any business directly or indirectly which competes with that of the broker.”

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The trial court found the last sentence of the non-compete rendered the entire clause unenforceable, and the Court of Appeal affirmed. The reasoning: presumably, that last sentence (bold-italicized above) purported to extend the non-compete term beyond two years, the maximum allowed under Louisiana’s non-compete statute.

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If you'll tell me your state, I'll look into this for you.

Customer: replied 1 year ago.
oklahoma
Expert:  Lane replied 1 year ago.

Bot***** *****ne; You can't stop someone from earning a living in their field.

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Non Compete agreements are enforceable when used properly. For instance: I am selling my business to you. You can have me sign a non compete agreement because you are buying my business, client base and good will.

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Expert:  Lane replied 1 year ago.

OK let me see what I can find

Expert:  Lane replied 1 year ago.

As in many states, non-competition covenants in Oklahoma are seen as a restraint on trade and are not favored by the courts.

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The Oklahoma legislature’s attitude toward non-competition covenants is reflected in Section 217 of Title 15 of the Oklahoma statutes.

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Section 217 provides that every contract by which any one is restrained from exercising a lawful profession, trade or business of any kind is void.

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The legislative intent here? (behind Section 217) is that a person should be able to go work for a company, leave that company (whether voluntarily or involuntarily), and then go to work for a competitor in order to earn a living.

Expert:  Lane replied 1 year ago.

Section 217 provides two (2) narrow exceptions to the general rule that non-competes are void and unenforceable:

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(1) Section 218 of Title 15 of the Oklahoma statutes, which allows the use of a non-compete agreement entered into as part of the sale of goodwill of a business; and

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(2) Section 219 of Title 15 of the Oklahoma statutes, which allows the use of a non-compete agreement entered into as part of the dissolution of a partnership

Expert:  Lane replied 1 year ago.

So the general (and very foundational) rule in OK is no that non-competes are unenforceable (except for that example I gave earlier (which manifests in OK law §218)

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And then there's one more for dissolution of partnerships (§219)

Expert:  Lane replied 1 year ago.

I hope this has helped.

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Please let me know if you have any questions at all.

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If this HAS helped, and you DON’T have other questions … I'd really appreciate a positive rating (using the rating request, faces, or stars on your screen)

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Otherwise, I won’t be credited for the work here.

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Thank you!

Lane

I hold a JD (Juris Doctorate, a doctoral degree in the law), with concentration in Tax Law, Estate law & Corporate law, an MBA, with specialization in finance & tax, as well as CFP® and CRPS designations. - I’ve been providing financial, Social Security & Medicare, estate, corporate & tax advice since 1986.