Entrepreneurs and employees in Oregon may benefit from learning more about the provisions governing noncompeting agreements in the state. These agreements must meet several criteria described in the provisions, otherwise that are voidable by state law. Employers are required to inform employees of a noncompetition agreement within an offer of employment at least two weeks before the first day work.
Otherwise, the agreement may be presented following an employee’s advancement by the employer. Noncompetition agreements may also be valid if the employer has a protectable interest, such as the employee having access to trade secrets or other confidential information that could be competitively sensitive, like marketing strategies or product development plans. These agreements may also apply to on-air talent working for an employer in the broadcasting industry. These agreements are valid for on-air talent if the employer spent the equivalent of at least 10 percent of the talent’s salary on recourses within the year preceding termination.
The on-air noncompetitive agreement may also be valid if the employer provides the employee with compensation at least 50 percent equivalent to annual salary or 50 percent the median four-person family income during the restriction period. State laws prohibit restriction periods from exceeding two years after the date of termination. Any time that extends the two-year timeframe is avoidable and will not be enforced by the state. The aforementioned provisions are applicable to noncompetitive agreements concerning the employer-employee relationship, bonuses restriction agreements are not applicable.
People who need help understanding the terms or implications of a noncompetitive agreement may benefit from confiding in legal counsel. Lawyers may be able to review the terms of the agreement and determine if the terms are legally sound and reasonable. Businesses that often engage in complicated litigation typically benefit from employing competent legal counsel that is readily available. These lawyers are often invaluable in negotiating amicable terms and avoiding contentious disputes in court.
Source: Oregon Legislature, “653.295 Noncompetition agreements; bonus restriction agreements; applicability of restrictions.”, October 23, 2014