Noncompete agreements can be powerful tools for protecting a business. However, in Oregon and Washington, the rules regarding enforceability of noncompetes have tightened in recent years. Employers who don’t follow the law risk having their agreements thrown out entirely — and employees benefit from knowing when a noncompete is enforceable.
This guide explains the key requirements under Oregon’s ORS 653.295 and Washington’s RCW 49.62 to help you understand whether your agreement holds up.
Oregon’s Noncompete Agreement Rules
In 2021, Oregon updated ORS 653.295, which significantly limited when noncompetes can be enforced. The main requirements include:
- Minimum salary threshold – The employee must earn at least $100,533 annually (adjusted for inflation).
- Time limit – The noncompete cannot last more than 12 months after the employee leaves.
- Geographic and scope limits – The restrictions must be reasonable and tied to the employer’s legitimate business interests.
- Written notice – The agreement must be presented to the employee at least two weeks before their start date, or at the time of a promotion.
If any of these requirements aren’t met, Oregon law typically voids the agreement.
Washington’s Noncompete Agreement Rules
Washington’s RCW 49.62 also imposes strict limits:
- Minimum earnings – At least $116,593/year for employees, $291,482/year for independent contractors.
- Duration limit – No more than 18 months, unless the employer can prove a longer term is necessary to protect business interests.
- Geographic and activity limits – Must be no broader than necessary to protect trade secrets or proprietary information.
- No enforcement for layoffs without pay – If an employee is laid off, the employer must pay them during the noncompete period for it to be enforceable.
Why It Matters for Employers and Employees
For employers, an unenforceable noncompete wastes time, resources, and may even damage employee relations. For employees, knowing your rights can protect your career mobility.
Because both states’ laws are complex — and violations are costly — reviewing agreements with an experienced business attorney is critical.
When to Contact a Lawyer
Consider speaking with an attorney if:
- You’re an employer drafting or updating a noncompete.
- You’re an employee asked to sign a noncompete and want to know your rights.
- You’re involved in a dispute over an existing noncompete agreement.
At Chenoweth Law Group LLC, we help businesses and professionals navigate Oregon and Washington’s noncompete laws with clarity and strategy. Whether you’re seeking to enforce an agreement or challenge one, our team can guide you through the process.
