Over the last several years, the Oregon Legislature has whittled away employers’ ability to enforce employee non-competition agreements (see our posts from 2007, 2015). Senate Bill 169, which Governor Brown signed into law on May 21, 2021, further limits an employer’s ability to impose non-competition obligations on employees. Effective starting January 1, 2022, the statute will require:
Existing requirements for non-competes will remain in effect, including:
Unless these requirements are met, the non-competition agreement is “void and unenforceable.” The current statute provides that a non-compliant agreement is “voidable,” not “void.”
Note that these requirements apply only to non-competition agreements connected to employment; they do not apply to covenants not to solicit employees or customers, nor do they apply to non-competition agreements outside of the employment setting. For example, agreements that prevent employees from “soliciting or transacting business” with the employer’s customers or agreements with the seller of a business fall outside the scope of the statute.