The new rule requires an employer to provide a terminated employee with a signed, written copy of their noncompetition agreement within 30 days after their termination date. Failure to do so will render the agreement voidable and unenforceable in the state of Oregon (effective January 1, 2020).

The requirement to provide a terminated employee with a copy of the noncompetition agreement within 30 days after termination also applies when an employee voluntarily quits, so employers should provide any non-competition agreements as a routine step in your employee off-boarding process. Providing a copy of the agreement on or before the employees last day, such as during an exit interview, does not satisfy this requirement.

Applies to agreements entered into in 2020
The new legislation only applies to agreements entered into on or after January 1, 2020 but you may determine it is in your organization’s best interest to begin providing a copy to all employees, regardless of when the agreement was initially entered into. By providing this notice for new employees and at end of employment, your organization will demonstrate that you have protectable interests and will strengthen your position if any legal action were necessary.

Prior requirements for noncompete agreements
The Oregon noncompetition statute already required that:

• Employers must inform the employee of the noncompetition agreement in a written employment offer received at least two weeks before the employee’s first day of employment, or for existing employees the agreement must be entered into upon promotion;
  
• Employee must be engaged in exempt administrative, executive, or professional level work;
  
• Employer must have a “protectable interest” (access to trade secrets or competitively sensitive confidential information);
  
• Employee’s gross annual salary and commissions at the time of termination must exceed the median family income for a four-person family; and
  
• The term of a noncompetition agreement may not exceed 18 months from the termination date.

Members should train their HR personnel and hiring managers on the new rules and take inventory of any existing noncompete agreements, ensuring adequate document retention standards are in place to track any existing agreements.

If you would like to discuss your organization’s policies and employment agreements, including non-solicitation and non-transaction agreements, contact UEA’s Employment Law attorneys on our Employer Helpline.

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