Client Alert: Oregon State Legislature Modifies Law on Non-Compete Agreements
On May 24, 2019, Oregon Governor Kate Brown signed House Bill 2992, which adds additional restrictions to an employer’s noncompete agreement. This new law requires that, for any noncompete agreement signed after January 1, 2020, the employer must provide a copy of the signed agreement within 30 days after the employee’s termination or separation from employment in order for the agreement to be enforceable.
This new restriction adds to Oregon’s existing noncompete statute (ORS 653.295), which requires that:
- Employers must inform the employee in a written employment offer at least two weeks before the first day of employment that a noncompetition agreement is required as a condition of employment. Otherwise, the noncompete agreement must be entered into as part of a bona fide advancement of the employee.
- The noncompete period can be no longer than 18-months following the employee’s separation.
- The noncompete provisions can only be applied against employees who are exempt from overtime and minimum wage laws in Oregon (e.g., salaried managerial or executive employees who meet the white-collar exemption tests).
- The noncompete covenants can only be applied against employees who have access to a “protectable interest” such as trade secrets or other sensitive information.
- Only employees whose annual salary (plus commissions) exceeds the median U.S. household income for a family of four may be subjected to a noncompete provision.
Employers should bear in mind, however, that like its new sister law in Washington, the Oregon law applies only to general noncompete provisions; these restrictions do not apply to non-solicitation or confidentiality agreements.