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Non Compete Agreement Enforceable In Oregon

Oregon (July 29, 2019) – On May 14, 2019, Oregon Governor Kate Brown signed House Bill (HB) 2992, which amended the existing non-compete clause to require employers to submit a written copy of their non-compete agreements signed within 30 days of the termination of their employment contract. The change has come on the heels of several others in recent years gradually implemented to compete with Oregon employees before the overzealous application. In 2015, Oregon`s legislature reduced the maximum duration of non-compete bans from 24 months to 18 months, and in 2017 it banned the application of a non-compete clause for home nurses. The new termination reporting obligations will come into effect on January 1, 2020. (e) within thirty days of the worker`s termination, the employer provides the worker with a written copy signed of the terms of the competition agreement. The court found that Pelican Bay had required the former employee to sign an «employee confirmation» in which he stated that he was prepared to comply with the Pelican Bay Manual guidelines. The manual, which was added by reference, contained a confidentiality agreement that provided that Pelican Bay`s proprietary confidential information contained its client lists and that such information could not be disclosed to third parties. In addition, the Pelican Bay president had met with the former employee and personally reminded him of his confidentiality obligations – and this meeting was recalled by a written agreement. While this is a positive decision for Oregon businesses, especially for companies for which customer lists are particularly important, employers should remain vigilant when it comes to proprietary information and review their policies and agreements on employee access and use of this information.

As a reminder, the restrictions of ORS 653.295, including the new termination obligation imposed by HB 2992, do not apply to all types of restrictive agreements. The law applies only to «non-competition agreements» which are defined as agreements «under which the worker accepts that the worker, alone or as an employee of another person, will not compete with the employer for the provision of products, processes or services similar to the products, processes or services provided by the employer.» The law does not apply to confidentiality agreements or an «agreement not to recruit employer staff or to recruit or do business with employer clients.» If the answer to any of these questions is negative, your non-compete clause is unenforceable in Oregon.


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