653.295
Noncompetition agreements; bonus restriction agreements; applicability of
restrictions. (1)
A noncompetition agreement entered into between an employer and employee is
void and unenforceable unless:
(a)(A) The
employer informs the employee in a written employment offer received by the
employee at least two weeks before the first day of the employee’s employment
that a noncompetition agreement is required as a condition of employment; or
(B) The
noncompetition agreement is entered into upon a subsequent bona fide
advancement of the employee by the employer;
(b) The employee
is a person described in ORS 653.020 (3);
(c) The employer
has a protectable interest as described in subsection (2) of this section;
(d) Within 30
days after the date of the termination of the employee’s employment, the
employer provides a signed, written copy of the terms of the noncompetition
agreement to the employee; and
(e) The total
amount of the employee’s annual gross salary and commissions, calculated on an
annual basis, at the time of the employee’s termination exceeds $100,533,
adjusted annually for inflation pursuant to the Consumer Price Index for All
Urban Consumers, West Region (All Items), as published by the Bureau of Labor
Statistics of the United States Department of Labor immediately preceding the
calendar year of the employee’s termination. This paragraph does not apply to
an employee described in subsection (2)(c) of this section.
(2) For purposes
of subsection (1)(c) of this section, an employer has a protectable interest
when the employee:
(a) Has access to
trade secrets, as defined in ORS 646.461;
(b) Has access to
competitively sensitive confidential business or professional information that
otherwise would not qualify as a trade secret, including product development
plans, product launch plans, marketing strategy or sales plans; or
(c) Is employed
as an on-air talent by an employer in the business of broadcasting and the
employer:
(A) In the year
preceding the termination of the employee’s employment, expended resources
equal to or exceeding 10 percent of the employee’s annual salary to develop,
improve, train or publicly promote the employee, provided that the resources
expended by the employer were expended on media that the employer does not own
or control; and
(B) Provides the
employee, for the time the employee is restricted from working, the greater of
compensation equal to at least:
(i) Fifty percent
of the employee’s annual gross base salary and commissions at the time of the
employee’s termination; or
(ii) Fifty
percent of $100,533, adjusted annually for inflation pursuant to the Consumer
Price Index for All Urban Consumers, West Region (All Items), as published by
the Bureau of Labor Statistics of the United States Department of Labor
immediately preceding the calendar year of the employee’s termination.
(3) The term of a
noncompetition agreement may not exceed 12 months from the date of the employee’s
termination. The remainder of a term of a noncompetition agreement in excess of
12 months is void and may not be enforced by a court of this state.
(4) Subsections
(1) and (3) of this section apply only to noncompetition agreements made in the
context of an employment relationship or contract and not otherwise.
(5) Subsections
(1) and (3) of this section do not apply to:
(a) Bonus
restriction agreements, which are lawful agreements that may be enforced by the
courts in this state; or
(b) A covenant
not to solicit employees of the employer or solicit or transact business with
customers of the employer.
(6) Nothing in
this section restricts the right of any person to protect trade secrets or
other proprietary information by injunction or any other lawful means under
other applicable laws.
(7)
Notwithstanding subsection (1)(b) and (e) of this section, a noncompetition
agreement is enforceable for the full term of the agreement, for up to 12
months, if the employer agrees in writing to provide the employee, for the time
the employee is restricted from working, the greater of:
(a) Compensation
equal to at least 50 percent of the employee’s annual gross base salary and
commissions at the time of the employee’s termination; or
(b) Fifty percent
of $100,533, adjusted annually for inflation pursuant to the Consumer Price
Index for All Urban Consumers, West Region (All Items), as published by the
Bureau of Labor Statistics of the United States Department of Labor immediately
preceding the calendar year of the employee’s termination.
(8) As used in
this section:
(a) “Bonus
restriction agreement” means an agreement, written or oral, express or implied,
between an employer and employee under which:
(A) Competition
by the employee with the employer is limited or restrained after termination of
employment, but the restraint is limited to a period of time, a geographic area
and specified activities, all of which are reasonable in relation to the services
described in subparagraph (B) of this paragraph;
(B) The services
performed by the employee pursuant to the agreement include substantial
involvement in management of the employer’s business, personal contact with
customers, knowledge of customer requirements related to the employer’s
business or knowledge of trade secrets or other proprietary information of the
employer; and
(C) The penalty
imposed on the employee for competition against the employer is limited to
forfeiture of profit sharing or other bonus compensation that has not yet been
paid to the employee.
(b) “Broadcasting”
means the activity of transmitting of any one-way electronic signal by radio
waves, microwaves, wires, coaxial cables, wave guides or other conduits of
communications.
(c) “Employee”
and “employer” have the meanings given those terms in ORS 652.310.
(d) “Noncompetition
agreement” means a written agreement between an employer and employee under
which the employee agrees that the employee, either alone or as an employee of
another person, will not compete with the employer in providing products,
processes or services that are similar to the employer’s products, processes or
services for a period of time or within a specified geographic area after
termination of employment. [1977 c.646 §2; 1983 c.828 §1; 1985 c.565 §85; 2005
c.22 §459; 2007 c.902 §2; 2015 c.429 §1; 2019 c.121 §1; 2021 c.75 §1]
Notes of Decisions
Or. Psychiatric Partners, LLP v. Henry, 429 P.3d 399 (Or. Ct. App. 2018).
· cites it 46× “In a pretrial motion, plaintiff moved to strike as insufficiently pleaded defendant's "affirmative defense" that the parties' agreement was unenforceable under ORS 653.295 ; the trial court denied that motion.”
Oregon Psychiatric Partners, LLP v. Henry, 504 P.3d 1223 (Or. Ct. App. 2022).
· cites it 100× “) In her answer, defendant asserted an “affirmative defense” that the noncompetition agreement “fails to sat- isfy the requirements of ORS 653.295 and is unenforce- able.” Generally speaking, ORS 653.”
Dymock v. Norwest Saf. Prot. Equip. for Oregon Indus., Inc., 19 P.3d 934 (Or. Ct. App. 2001).
· cites it 16× “” 1 Defendant also argued that, even if the agreement is a “non-competition agreement” within the meaning of ORS 653.295, discharging an employee for refusing to sign such an agreement does not fall within the recognized exceptions to the at-will employment doctrine.”
McGee v. Coe Mfg. Co., 125 P.3d 26 (Or. Ct. App. 2005).
· cites it 13× “Defendant invokes the provisions of ORS 653.295, arguing that, because the employment agreement was entered into during the course of plaintiffs employment, it is unenforceable.”
Ikon Off. Solutions, Inc. v. Am. Off. Prods., Inc., 178 F. Supp. 2d 1154 (D. Or. 2001).
· cites it 5× “Defendant Bergey argues that her non-competition agreement is void because she began working for IKON on December 1, 1989, but did not sign a non-competition agreement until December 18, 1989.”
Bernard v. S.B., Inc., 350 P.3d 460 (Or. Ct. App. 2015).
· cites it 8× “Plaintiffs legal theories rely on her contention that her noncompetition agreement with defendant is unenforceable under ORS 653.295 because defendant failed to notify her two weeks before she started work that a noncompetition agreement would be required.”
Hopper v. All Pet Animal Clinic, Inc., 861 P.2d 531 (Wyo. 1993).
· cites it 2× “Standing alone, the covenant not to compete contained in the Employment Agreement failed due to lack of separate consideration.”
Pac. Veterinary Hosp. v. White, 696 P.2d 570 (Or. Ct. App. 1985).
· cites it 9× “Plaintiff appeals, contending that the court erred in concluding that ORS 653.295 1 prohibits enforcement of the restrictive covenant.”
Konecranes, Inc. v. Scott Sinclair, 340 F. Supp. 2d 1126 (D. Or. 2004).
· cites it 4× “Validity of the Non-Compete Agreement ORS 653.295 provides that: (1) A noncompetition agreement entered into between an employer and employee is void and shall not be enforced by any court in this state unless the agreement is entered into upon the: (a) Initial employment of the…”
Peterson Mach. Co. v. May, 496 P.3d 672 (Or. Ct. App. 2021).
· cites it 5× “, use or disclose—trade secret informa- tion when doing so.9 In our view, evidence that May was a 9 Peterson and May did enter into a noncompetition agreement.”
MacHado-miller v. Mersereau & Shannon, LLP, 43 P.3d 1207 (Or. Ct. App. 2002).
· cites it 2× “2 In declaring when noncompetition agreements are and are not enforceable, ORS 653.295 provides, in relevant part: “(1) A noncompetition agreement entered into between an employer and employee is void and shall not be enforced by any court in this state unless the agreement is…”
— Or. Rev. Stat. § 653.295(1) — 11 cases
Oregon Psychiatric Partners, LLP v. Henry, 504 P.3d 1223 (Or. Ct. App. 2022).
“) In her answer, defendant asserted an “affirmative defense” that the noncompetition agreement “fails to sat- isfy the requirements of ORS 653.295 and is unenforce- able.” Generally speaking, ORS 653.”
Or. Psychiatric Partners, LLP v. Henry, 429 P.3d 399 (Or. Ct. App. 2018).
“In a pretrial motion, plaintiff moved to strike as insufficiently pleaded defendant's "affirmative defense" that the parties' agreement was unenforceable under ORS 653.295 ; the trial court denied that motion.”
Ikon Off. Solutions, Inc. v. Am. Off. Prods., Inc., 178 F. Supp. 2d 1154 (D. Or. 2001).
“Defendant Bergey argues that her non-competition agreement is void because she began working for IKON on December 1, 1989, but did not sign a non-competition agreement until December 18, 1989.”
Dymock v. Norwest Saf. Prot. Equip. for Oregon Indus., Inc., 19 P.3d 934 (Or. Ct. App. 2001).
“” 1 Defendant also argued that, even if the agreement is a “non-competition agreement” within the meaning of ORS 653.295, discharging an employee for refusing to sign such an agreement does not fall within the recognized exceptions to the at-will employment doctrine.”
— Or. Rev. Stat. § 653.295(1)(a) — 2 cases
MacHado-miller v. Mersereau & Shannon, LLP, 43 P.3d 1207 (Or. Ct. App. 2002).
“2 In declaring when noncompetition agreements are and are not enforceable, ORS 653.295 provides, in relevant part: “(1) A noncompetition agreement entered into between an employer and employee is void and shall not be enforced by any court in this state unless the agreement is…”
Oregon Psychiatric Partners, LLP v. Henry, 504 P.3d 1223 (Or. Ct. App. 2022).
“) In her answer, defendant asserted an “affirmative defense” that the noncompetition agreement “fails to sat- isfy the requirements of ORS 653.295 and is unenforce- able.” Generally speaking, ORS 653.”
— Or. Rev. Stat. § 653.295(1)(a)(A) — 3 cases
— Or. Rev. Stat. § 653.295(1)(a)(B) — 1 case
— Or. Rev. Stat. § 653.295(1)(b) — 1 case
Or. Psychiatric Partners, LLP v. Henry, 429 P.3d 399 (Or. Ct. App. 2018).
“In a pretrial motion, plaintiff moved to strike as insufficiently pleaded defendant's "affirmative defense" that the parties' agreement was unenforceable under ORS 653.295 ; the trial court denied that motion.”
— Or. Rev. Stat. § 653.295(1)(c) — 1 case
Or. Psychiatric Partners, LLP v. Henry, 429 P.3d 399 (Or. Ct. App. 2018).
“In a pretrial motion, plaintiff moved to strike as insufficiently pleaded defendant's "affirmative defense" that the parties' agreement was unenforceable under ORS 653.295 ; the trial court denied that motion.”
— Or. Rev. Stat. § 653.295(1)(d) — 1 case
Oregon Psychiatric Partners, LLP v. Henry, 504 P.3d 1223 (Or. Ct. App. 2022).
“) In her answer, defendant asserted an “affirmative defense” that the noncompetition agreement “fails to sat- isfy the requirements of ORS 653.295 and is unenforce- able.” Generally speaking, ORS 653.”
— Or. Rev. Stat. § 653.295(2) — 5 cases
Or. Psychiatric Partners, LLP v. Henry, 429 P.3d 399 (Or. Ct. App. 2018).
“In a pretrial motion, plaintiff moved to strike as insufficiently pleaded defendant's "affirmative defense" that the parties' agreement was unenforceable under ORS 653.295 ; the trial court denied that motion.”
Dymock v. Norwest Saf. Prot. Equip. for Oregon Indus., Inc., 19 P.3d 934 (Or. Ct. App. 2001).
“” 1 Defendant also argued that, even if the agreement is a “non-competition agreement” within the meaning of ORS 653.295, discharging an employee for refusing to sign such an agreement does not fall within the recognized exceptions to the at-will employment doctrine.”
McGee v. Coe Mfg. Co., 125 P.3d 26 (Or. Ct. App. 2005).
“Defendant invokes the provisions of ORS 653.295, arguing that, because the employment agreement was entered into during the course of plaintiffs employment, it is unenforceable.”
Oregon Psychiatric Partners, LLP v. Henry, 504 P.3d 1223 (Or. Ct. App. 2022).
“) In her answer, defendant asserted an “affirmative defense” that the noncompetition agreement “fails to sat- isfy the requirements of ORS 653.295 and is unenforce- able.” Generally speaking, ORS 653.”
— Or. Rev. Stat. § 653.295(3) — 1 case
— Or. Rev. Stat. § 653.295(4)(b) — 5 cases
Or. Psychiatric Partners, LLP v. Henry, 429 P.3d 399 (Or. Ct. App. 2018).
“In a pretrial motion, plaintiff moved to strike as insufficiently pleaded defendant's "affirmative defense" that the parties' agreement was unenforceable under ORS 653.295 ; the trial court denied that motion.”
Oregon Psychiatric Partners, LLP v. Henry, 504 P.3d 1223 (Or. Ct. App. 2022).
“) In her answer, defendant asserted an “affirmative defense” that the noncompetition agreement “fails to sat- isfy the requirements of ORS 653.295 and is unenforce- able.” Generally speaking, ORS 653.”
Peterson Mach. Co. v. May, 496 P.3d 672 (Or. Ct. App. 2021).
“, use or disclose—trade secret informa- tion when doing so.9 In our view, evidence that May was a 9 Peterson and May did enter into a noncompetition agreement.”
— Or. Rev. Stat. § 653.295(5)(b) — 2 cases
— Or. Rev. Stat. § 653.295(6) — 1 case
Dymock v. Norwest Saf. Prot. Equip. for Oregon Indus., Inc., 19 P.3d 934 (Or. Ct. App. 2001).
“” 1 Defendant also argued that, even if the agreement is a “non-competition agreement” within the meaning of ORS 653.295, discharging an employee for refusing to sign such an agreement does not fall within the recognized exceptions to the at-will employment doctrine.”
— Or. Rev. Stat. § 653.295(6)(b) — 1 case
— Or. Rev. Stat. § 653.295(6)(c) — 1 case
— Or. Rev. Stat. § 653.295(7)(d) — 1 case
Or. Psychiatric Partners, LLP v. Henry, 429 P.3d 399 (Or. Ct. App. 2018).
“In a pretrial motion, plaintiff moved to strike as insufficiently pleaded defendant's "affirmative defense" that the parties' agreement was unenforceable under ORS 653.295 ; the trial court denied that motion.”
— Or. Rev. Stat. § 653.295(l)(a) — 1 case
McGee v. Coe Mfg. Co., 125 P.3d 26 (Or. Ct. App. 2005).
“Defendant invokes the provisions of ORS 653.295, arguing that, because the employment agreement was entered into during the course of plaintiffs employment, it is unenforceable.”
— Or. Rev. Stat. § 653.295(l)(a)(A) — 1 case
Bernard v. S.B., Inc., 350 P.3d 460 (Or. Ct. App. 2015).
“Plaintiffs legal theories rely on her contention that her noncompetition agreement with defendant is unenforceable under ORS 653.295 because defendant failed to notify her two weeks before she started work that a noncompetition agreement would be required.”
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