For example, some restraints are so injurious to competition that they are considered unlawful as a matter of law. See Crown Paint Co. v. Bankston, 1981 OK 104, ¶ 7, 640 P.2d 948, 950; Northern Pac. Ry. Co. v. U.S., 356 U.S. 1, 78 S.Ct. 514, 2 L.Ed.2d 545 (1958). Agreements between competitors to fix the price of goods or services, the chief "evil" of monopolies, is the most widely recognized of these per se offenses.
Okla. Stat. tit. 79, Section(s) 1; see generally Board of Regents of the Univ. of Okla. v. National Collegiate Athletic Ass'n, 561 P.2d 499, 505-06 (Okla. 1977) (discussing Oklahoma Antitrust Act). An act restrains trade under Okla. Stat. tit. 79, Section(s) 1 if it "prejudice[s] public interests by unduly restricting competition, or unduly obstruct[s] the due course of trade, or . . . injuriously restrain[s] trade." Crown Paint Co. v. Bankston, 640 P.2d 948, 950 (Okla. 1981), cert. denied, 455 U.S. 946 (1982). The Oklahoma Antitrust Act provides in relevant part:
See Okla. Stat. tit. 15, § 217 (“Every contract by which any one is restrained from exercising a lawful profession, trade or business of any kind, otherwise than as provided by Sections 218 and 219 of this title, or otherwise than as provided by Section 2 of this act, is to that extent void.”); see also Bayly, Martin & Fay, Inc. v. Pickard, 1989 OK 122, ¶ 12, 780 P.2d 1168, 1172 (“Section 217 prohibits only unreasonable restraints on the exercise of a lawful profession, trade, or business.”); Crown Paint Co. v. Bankston, 1981 OK 104, ¶ 23, 640 P.2d 948, 952 (same). Chris claims his NCA is unenforceable as an unreasonable restraint of trade and an unlawful restriction of a former employee prohibited by § 219A.
See Okla. Const. art. V, § 44 & § 51. Article 28A, § 2(A)(2)'s discretion allows liquor and wine manufacturers and wholesalers to have exclusive distributorships, and this Court has upheld exclusive distributorships as lawful. Crown Paint Co. v. Bankston , 1981 OK 104, ¶ 13, 640 P.2d 948, 951 (finding an agreement between a manufacturer and a distributor setting up an exclusive territory within which the distributor will have exclusive rights to sell does not in itself violate antitrust provisions); Teleco, Inc. v. Ford Indus., Inc. , 1978 OK 159, ¶ 9, 587 P.2d 1360, 1363 ("It is, however, well settled that it is not a per se violation of antitrust law for a manufacturer or supplier to agree with the distributor to give him an exclusive franchise or distributorship, even if this means cutting off another distributor."). We, therefore, hold that SB 608 is not a proper use of legislative authority under the anticompetitive provisions of the Oklahoma Constitution.V. CONCLUSION
Thus, only those restraints of trade which are unreasonable are outlawed. Crown Paint Co. v. Bankston, 640 P.2d 948 (Okla. 1981), cert. denied, 455 U.S. 946, 102 S.Ct. 1444, 71 L.Ed.2d 659 (1982). In Northern Pacific Ry. v. United States, 356 U.S. 1, 5, 78 S.Ct. 514, 518, 2 L.Ed.2d 545 (1958), the Court recognized that certain agreements, "because of their pernicious effect on competition and lack of any redeeming virtue are conclusively presumed to be unreasonable" and illegal.
Id. at 19 (quoting Bd. of Regents of Univ. of Oklahoma v. Nat'l Collegiate Athletic Ass'n, 561 P.2d 499, 508 (Okla. 1977)) (emphasis in ProValue's response). Crown Paint Co. v. Bankston, 640 P.2d 948, 950-51 (Okla. 1981)). Id.
Oklahoma State courts interpret Okla. Stat. Ann. tit. 15, sec. 217, to prohibit only unreasonable restraints on the exercise of a lawful profession, trade, or business. Bayly, Martin & Fay, Inc. v. Pickard,supra at 1172; Crown Paint Co. v. Bankston, 640 P.2d 948, 952 (Okla.1981); Bd. of Regents v. Natl. Collegiate Athletic Association, 561 P.2d 499, 508 (Okla.1977). The majority rule is that reasonable restrictions will be enforced.
However, this finding was eroded by Tatum v. Colonial Life Accident Ins. Co., 465 P.2d 448, 451 (Okla. 1970), which held that a limited restraint on trade did not violate § 217. In both Crown Paint Co. v. Bankston, 640 P.2d 948, 952 (Okla. 1981), cert. denied, 455 U.S. 946, 102 S.Ct. 1444, 71 L.Ed.2d 659 (1982) and Bd. of Regents v. Nat'l Collegiate Athletic Ass'n (NCAA), 561 P.2d 499, 508, 85 A.L.R.3d 953, 967 (Okla. 1977), we found that § 217 invalidated only unreasonable restraints on the exercise of trade. Although the rule of reason which requires that in order to be valid, a covenant must be deemed reasonable by the court, had been incorporated as a matter of law into agreements falling within the parameters of 79 O.S. 1981 § 1[ 79-1], its application to § 217 was questionable before the Crown Paint and NCAA decisions.
See Young v. Seaway Pipeline, Inc., 576 P.2d 1148, 1150 (Okla. 1977); Board of Regents v. NCAA, 561 P.2d 499, 505 (Okla. 1977).Crown Paint Co. v. Bankston, 640 P.2d 948 (Okla. 1981), cert. den. 455 U.S. 946, 102 S.Ct. 1444, 71 L.Ed.2d 659; Teleco, Inc. v. Ford Industries, Inc., supra note 9. Additionally, since the very essence of an action for interference with business relations is that the interference be unlawful or unjustified, we find the rule of reason analysis to be pointedly justified in analyzing appellees' actions.
¶ 25 Prior to the enactment of section 219A, the enforceability of a customer non-solicitation agreement was determined pursuant to a rule of reason analysis. See Bayly, 1989 OK 122 at ¶ 11, 780 P.2d at 1171 (footnotes omitted) ("Although the rule of reason which requires that in order to be valid, a covenant must be deemed reasonable by the court, had been incorporated as a matter of law into agreements falling within the parameters of 79 O.S. 1981 § 1, its application to § 217 was questionable before the [ Crown Paint v. Bankston, 1981 OK 104, 640 P.2d 948] and [ Bd. of Regents v. Nat'l Collegiate Athletic Ass'n, 1977 OK 17, 561 P.2d 499] decisions."). A rule of reason analysis asks three questions: (1) what is the relevant market; (2) what is the effect of the restraint on competition in that market; and (3) if the effect is anticompetitive, are there are any procompetitive benefits that outweigh the anticompetitive effects.