Are employee non-compete agreements enforceable in Oregon?
An Oregon employee non-compete is void unless it meets notice or advancement, protectable-interest and signed-copy requirements, plus exempt-status and pay conditions unless waived by the written-payment route or, for pay alone, the broadcasting exception. On a touch screen, a tap shows all 2 sources in this group. ORS 653.295 ordinarily requires advance written notice or a bona fide advancement, exempt status, pay above the annual threshold, a protectable interest, and a signed copy within 30 days after termination . Its optional written payment route replaces the exempt-status and pay gates only. On a touch screen, a tap shows all 2 sources in this group.
Oregon's ORS 653.295 starts from a default of unenforceability. An employer must satisfy the applicable ordinary or paid route as well as the other statutory conditions.
Because the statute treats a nonconforming covenant as void rather than merely voidable, missed notice or post-termination delivery can defeat the non-compete . Income below the threshold defeats the ordinary route, though the employer may qualify under the separate written payment route . The sections below walk through each requirement and its drafting consequences.
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Subsection (7) offers a written payment route notwithstanding only the exempt-status and earnings conditions in subsection (1)(b) and (e).
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.
See ORS 653.295(7).
ORS 653.295(1) states the ordinary notice or advancement, exempt-status, protectable-interest, post-termination-copy and earnings conditions, with a separate broadcasting exception to the earnings condition.
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.
See ORS 653.295(1).
What must a valid Oregon non-compete satisfy?
Four more conditions beyond the notice rule. The employee must be a salaried exempt worker, the employer must have a statutory protectable interest, the employer must deliver a signed copy of the terms within 30 days after termination, and the employee's annual gross salary and commissions must exceed an inflation-indexed threshold .
The notice or bona-fide-advancement requirement in subsection (1)(a) is only the entry point. Subsections (1)(b) through (1)(e) add the ordinary-route qualifications; subsection (7) offers a paid alternative to (1)(b) and (1)(e), while leaving the other gates intact .
The 30-day post-termination copy requirement in subsection (1)(d) is easy to overlook because it falls due after the employment relationship ends. The state labor agency lists it as a standalone condition of validity alongside the notice, salary, and exempt-status requirements .
The signed-copy delivery under ORS 653.295(1)(d) is an independent condition of validity that falls due within 30 days after termination — after the employment relationship has already ended — so a covenant compliant in every other respect is still void where that post-termination copy is not delivered. On a touch screen, a tap shows all 2 sources in this group.
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Subsection (7) permits a written restriction-period payment alternative to only the exempt-status and earnings conditions in subsection (1)(b) and (e).
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.
See ORS 653.295(7).
ORS 653.295(1)(b)-(e) sets the exempt-status, protectable-interest, 30-day signed-copy, and salary-threshold conditions for a valid Oregon non-compete.
(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.
See ORS 653.295(1)(b)-(e).
The Oregon Bureau of Labor and Industries lists exempt salaried status, an employer interest to protect, and delivery of a signed copy within 30 days after termination as conditions for a valid non-competition agreement.
In addition, a noncompetition agreement is also void unless: The employee meets the criteria for a salaried exempt employee whose annual income at termination exceeds a minimum amount adjusted each year for inflation. (See below for details). The employer has an interest to protect, such as trade secrets; sensitive, confidential business or professional information; product development plans; launch plans; marketing strategy or sales plans; and finally, The employer must also provide a signed, written copy of the terms of the noncompetition agreement to the employee within 30 days after the employee's termination.
See Oregon BOLI, Noncompetition Agreements.
Which Oregon employees earn enough to be bound by a non-compete?
Oregon’s ordinary employee non-compete route requires an exempt salaried employee whose annual gross salary and commissions at termination exceed the inflation-indexed threshold. On a touch screen, a tap shows all 2 sources in this group. The baseline set when the 2021 amendments took effect was $100,533, adjusted each year for inflation; for 2026 the pay must exceed $119,541. On a touch screen, a tap shows all 2 sources in this group. Subsection (7) separately lets an employer replace the exempt-status and pay gates with a written restriction-period payment commitment. On a touch screen, a tap shows all 3 sources in this group.
ORS 653.295(1)(e) ties the threshold to the Consumer Price Index for the West Region and measures compensation at termination ; BOLI publishes the indexed annual figures .
The applicable inflation-indexed figure is tied to the termination year, rather than the signing year .
ORS 653.295(1)(e) measures the ordinary-route salary-and-commissions threshold at termination against that year's inflation-indexed figure, not the year of hire. A worker who cleared the threshold at signing but falls below it at termination no longer qualifies for that route; the written payment alternative requires separate analysis. On a touch screen, a tap shows all 3 sources in this group.
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ORS 653.295(1)(e) requires that the employee's annual gross salary and commissions at termination exceed an inflation-indexed baseline of $100,533.
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.
See ORS 653.295(1)(e).
The Oregon Bureau of Labor and Industries explains that a valid covenant requires the employee's annual gross salary and commissions at termination to exceed a minimum amount the agency adjusts each year for inflation.
For the provisions of a noncompetition agreement to be valid, the statute generally requires that the total amount of the employee’s annual gross salary and commissions at the time of the employee’s termination must exceed a minimum amount. For 2022, the year SB 169 (2021) took effect, that number was $100,533. The statute also requires that this minimum annual amount be adjusted each year based on 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. BOLI will use the average annual inflation for Western Region provided by BLS to compute the minimum salary and commission going forward. Table of minimum salary and commission requirements by year Year Minimum Amount to Exceed Average Annual Inflation 2022 $100,533 8.0% 2023 $108,581 4.3% 2024 $113,241 2.8% 2025 $116,427 2.7% 2026 $119,541 TBD
See Oregon BOLI, Noncompetition Agreements.
Subsection (7) permits a written payment commitment to substitute for subsection (1)(b)'s exempt-status gate and subsection (1)(e)'s earnings gate.
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.
See ORS 653.295(7).
BOLI describes the ordinary eligibility gate as salaried exempt status and annual income at termination above the inflation-adjusted minimum.
The employee meets the criteria for a salaried exempt employee whose annual income at termination exceeds a minimum amount adjusted each year for inflation.
See Oregon BOLI, Noncompetition Agreements.
Can an Oregon employer enforce a non-compete against a worker below the salary threshold by paying during the restraint?
Yes, through a garden-leave option. ORS 653.295(7) lets an employer enforce a non-compete for up to 12 months even against an employee who does not meet the exempt-status or salary requirements, if the employer agrees in writing to pay, during the restricted period, the greater of half the employee's base salary and commissions or half the inflation-indexed threshold .
This pay-to-enforce path is the statute's safety valve. The employer trades compensation for enforceability and must commit to the payment in writing.
The labor agency describes the same option in plainer terms, framing it as enforcement available when the employer agrees to pay the greater of the two amounts for the term of the agreement .
The garden-leave path in ORS 653.295(7) is available only where the employer's written commitment to pay — the greater of the two statutory amounts, for the time the employee is restricted from working — appears in the agreement itself, so a covenant that leans on garden leave without that written payment promise falls back onto the exempt-status and salary-threshold gates it was meant to bypass. On a touch screen, a tap shows all 2 sources in this group.
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ORS 653.295(7) allows enforcement against an otherwise unqualified employee for up to 12 months if the employer agrees in writing to pay the greater of 50 percent of base salary and commissions or 50 percent of the inflation-indexed threshold during the restriction.
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.
See ORS 653.295(7).
The Oregon Bureau of Labor and Industries describes the garden-leave option as enforcement available when the employer agrees in writing to pay the greater of 50 percent of base salary plus commissions or 50 percent of the minimum salary.
when the employer agrees in writing to pay either 50% of the employee's annual base salary plus commissions at termination or 50% of minimum salary listed above, whichever is greater, for the term of the agreement.
See Oregon BOLI, Noncompetition Agreements.
How long can an Oregon non-compete last?
No more than 12 months from termination. ORS 653.295(3) caps the term at 12 months after the employee's termination, and any portion of the term beyond 12 months is void and cannot be enforced .
The 12-month cap is firm and self-executing. The 2021 amendments shortened the maximum term from 18 months to 12 months, and the statute voids only the excess rather than the whole covenant on this particular point.
The reference point matters: the clock runs from the date of termination, not from the date of breach or the date a lawsuit is filed. That fixed-from-termination measure is central to the tolling question discussed below.
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ORS 653.295(3) caps an Oregon non-compete at 12 months from termination and voids any portion of the term beyond 12 months.
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.
See ORS 653.295(3).
When must an Oregon non-compete be signed to be valid?
At the start of employment with two weeks' advance notice, or upon a later bona fide advancement. The Ninth Circuit applied that timing rule in Nike, Inc. v. McCarthy, holding that a non-compete signed in connection with a genuine promotion met the statutory requirements to be enforceable. On a touch screen, a tap shows all 2 sources in this group.
Continued employment alone is not a valid trigger. The covenant must be tied either to the original hire (with the two-week notice) or to a subsequent bona fide advancement.
In Nike v. McCarthy, the court analyzed whether a non-compete an executive signed in connection with a promotion to regional footwear sales manager qualified under the bona-fide-advancement path, and concluded it did.
A mid-employment non-compete rests on the ORS 653.295(1)(a) formation gateway — a written offer received at least two weeks before the first day of employment, or a subsequent bona fide advancement — and continued employment alone is not a qualifying trigger, so a covenant bolted on during employment without a genuine advancement is void. Nike v. McCarthy tested that timing requirement before the covenant was enforced. On a touch screen, a tap shows all 2 sources in this group.
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ORS 653.295(1)(a) requires either two weeks' advance written notice before the first day of employment or a subsequent bona fide advancement.
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
See ORS 653.295(1)(a).
Nike v. McCarthy held that a non-compete signed in connection with a bona fide advancement met the ORS 653.295 timing requirements and was enforceable.
Construing the Oregon statute and reviewing the circumstances surrounding McCarthy's promotion and the execution of the noncompete agreement, we hold that the agreement meets the statutory requirements to be enforceable.
See Nike, Inc. v. McCarthy, 379 F.3d 576 (9th Cir. 2004).
What counts as a protectable interest under Oregon's non-compete statute?
Access to trade secrets or to competitively sensitive confidential information. ORS 653.295(2) defines the protectable interest as access to trade secrets or to confidential business or professional information that would not qualify as a trade secret, and the Ninth Circuit in Nike, Inc. v. McCarthy treated highly confidential strategic information as a legitimate interest supporting enforcement. On a touch screen, a tap shows all 2 sources in this group.
The statute supplies three qualifying categories. The first two — access to trade secrets and access to competitively sensitive confidential information — are the ones most employers rely on, and the second is broader than trade-secret law.
A narrow third category covers certain on-air broadcasting talent, and it comes with its own promotional-spend and pay conditions rather than the ordinary salary threshold. On a touch screen, a tap shows all 2 sources in this group.
Nike v. McCarthy illustrates the second category. The court found a legitimate interest where a departing executive had acquired highly confidential information that a competitor could exploit, even without framing that information as a strict trade secret.
Oregon's protectable-interest requirement is concrete: it turns on the specific trade secrets or competitively sensitive strategic information the employee can access and exploit at a competitor, not a generic competitive concern, so a covenant resting on an unspecified interest has nothing to satisfy ORS 653.295(1)(c) and (2). Nike v. McCarthy turned on the particular strategic information at risk. On a touch screen, a tap shows all 2 sources in this group.
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ORS 653.295(2) defines a protectable interest as access to trade secrets or to competitively sensitive confidential business or professional information that would not qualify as a trade secret.
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
See ORS 653.295(2).
ORS 653.295(2)(c) supplies a third protectable-interest category for certain on-air broadcasting talent, conditioned on promotional spending and pay during the restriction rather than the ordinary salary threshold.
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.
See ORS 653.295(2)(c).
Nike v. McCarthy found a legitimate interest supporting enforcement where a departing executive had access to highly confidential strategic information a competitor could exploit.
We also hold that Nike has a legitimate interest in enforcing the agreement, because there is a substantial risk that McCarthy — in shaping Reebok's product allocation, sales and pricing strategies — could enable Reebok to divert a significant amount of Nike's footwear sales given the highly confidential information McCarthy acquired at Nike.
See Nike, Inc. v. McCarthy, 379 F.3d 576 (9th Cir. 2004).
ORS 653.295(1)(e) excludes the broadcasting employee described in subsection (2)(c) from the ordinary salary-and-commissions gate.
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.
See ORS 653.295(1)(e).
Is a defective Oregon non-compete void or merely voidable, and can a court fix it?
For agreements entered on or after January 1, 2022, a non-conforming employee non-compete is void, not merely voidable, so an employer should not assume a court can reform it into a lawful covenant. The statute expressly severs only the portion of a term beyond 12 months; the older voidable regime described in Bernard v. S.B., Inc. was superseded by the 2021 amendments. On a touch screen, a tap shows all 2 sources in this group.
The distinction is consequential. Under the prior law, a defective covenant was voidable, meaning it remained in effect until the employee took affirmative steps to void it. Bernard v. S.B., Inc. applied that older rule.
The 2021 amendments changed the default to void. A covenant that misses a statutory requirement is now unenforceable from the start, without any need for the employee to act. The statute does sever an over-long term, voiding only the portion beyond 12 months, but that targeted severance is not a general license for courts to rewrite an otherwise non-conforming covenant. For a clause-by-clause pass over a specific agreement against these statutory conditions, the Oregon non-compete reviewer checklist walks the full covenant suite item by item with each requirement's force level.
For agreements entered on or after January 1, 2022, a non-conforming employee non-compete is void rather than merely voidable — unenforceable from the start, with no act by the employee required — so a savings or reformation clause does not move it back into the enforceable column. ORS 653.295(3) supplies the only built-in repair: it severs the portion of a term beyond 12 months and voids the excess, which is not a license for a court to rewrite an otherwise non-conforming covenant, and the pre-2022 voidable rule from Bernard v. S.B., Inc. no longer applies. A covenant drawn to the ORS 653.295 checklist at the outset is the one that survives; a covenant built to be narrowed later is void as written. On a touch screen, a tap shows all 2 sources in this group.
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ORS 653.295(3) severs only the portion of a non-compete term beyond 12 months, voiding the excess rather than authorizing general judicial reformation.
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.
See ORS 653.295(3).
Bernard v. S.B., Inc. applied the pre-2022 rule that a defective non-compete was voidable rather than void and remained in effect until voided.
As explained below, we conclude that plaintiffs evidence established, at most, that the noncompetition agreement was voidable (not void) but remained valid and in effect at the time that defendant invoked it.
See Bernard v. S.B., Inc., 270 Or. App. 710 (2015).
Are non-solicitation covenants treated differently in Oregon?
Yes. ORS 653.295(5) excludes covenants not to solicit the employer's employees or customers from the non-compete checklist, so they are governed by common-law reasonableness instead. In Oregon Psychiatric Partners, LLP v. Henry, the Court of Appeals narrowed customers of the employer to those with an active or ongoing relationship and held the covenant at least partly enforceable as a non-solicitation agreement. On a touch screen, a tap shows all 3 sources in this group.
The statute carves non-solicitation and bonus-restriction covenants out of the rules in subsections (1) and (3).
Henry was decided in 2018 and refers to this carve-out by its former number, ORS 653.295(4)(b); the 2021 amendments renumbered the identical text to subsection (5)(b), so the court's construction of the customer exclusion remains good law. The same amendments also left the carve-out's wording unchanged.
In Henry, the employer's covenant did not satisfy the non-compete checklist, but the court treated the customer-restriction component as a non-solicitation agreement within the carve-out and remanded for further proceedings.
The court also narrowed the meaning of the customer carve-out, rejecting a broad reading that would let the exception swallow the rule.
The ORS 653.295(5)(b) carve-out reaches a covenant confined to customers with an active or ongoing relationship with the employer, not former or merely incidental patrons; Oregon Psychiatric Partners v. Henry read that customer carve-out narrowly, so a customer definition drawn wider than active relationships falls outside the carve-out and back into the non-compete checklist it cannot satisfy. On a touch screen, a tap shows all 2 sources in this group.
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ORS 653.295(5) excludes bonus-restriction agreements and covenants not to solicit the employer's employees or customers from the non-compete requirements of subsections (1) and (3).
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.
See ORS 653.295(5).
Oregon Psychiatric Partners v. Henry held that a covenant failing the non-compete checklist was at least in part enforceable as a customer non-solicitation agreement under the statutory carve-out.
For the reasons that follow, we agree with plaintiff's alternative argument that the agreement is at least in part enforceable under ORS 653.295(4)(b), and we leave to further proceedings in the trial court the resolution of any factual issues that may remain.
See Oregon Psychiatric Partners, LLP v. Henry, 293 Or. App. 471, 429 P.3d 399 (2018).
Oregon Psychiatric Partners v. Henry construed customers of the employer to mean people with an active or ongoing relationship, not former or incidental patrons.
Those definitions support defendant's contention that the phrase “customers of the employer” refers to those people with an active or ongoing relationship with the employer and does not include former or merely incidental patrons.
See Oregon Psychiatric Partners, LLP v. Henry, 293 Or. App. 471, 429 P.3d 399 (2018).
Does ORS 653.295 apply to sale-of-business and owner covenants in Oregon?
No. ORS 653.295(4) limits the statutory checklist and 12-month cap to non-competes made in the context of an employment relationship, so a covenant given as part of selling a business or by an owner outside of employment is not governed by the statute. Those covenants are instead evaluated under Oregon common-law reasonableness .
The statute draws an explicit line around the employment relationship.
Because the checklist and the 12-month limit do not reach non-employment covenants, a sale-of-business or owner non-compete is analyzed under the common-law rule of reason — focused on a legitimate protectable interest and reasonable scope in time, geography, and activity — rather than the ORS 653.295 conditions. Sale-of-business restraints have historically been given more latitude than employee covenants.
An employee non-compete must clear the ORS 653.295 checklist, but a covenant given as part of a business sale or by an owner outside the employment relationship falls outside the statute and is measured under common-law reasonableness, so the 12-month cap and the salary and notice gates do not reach it; a sale-of-business restraint confined to the employee checklist gives up the wider latitude those covenants ordinarily receive .
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ORS 653.295(4) limits the statutory non-compete checklist and 12-month cap to covenants made in the context of an employment relationship, leaving sale-of-business and owner covenants outside the statute.
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.
See ORS 653.295(4).
Does an Oregon non-compete toll or extend during breach or litigation?
Oregon authority is silent, and the statute's fixed cap cuts against tolling. ORS 653.295(3) measures the maximum 12-month term from the date of termination and voids any term in excess of 12 months, so a clause that purports to pause and extend the restriction past 12 months from termination risks running into that hard cap. No Oregon statute or case squarely approves or rejects a tolling clause .
Many covenants include a clause stating that the restricted period pauses while the employee is in breach or while litigation is pending, so the employer receives the full period of compliance. Oregon's identified statutes and cases do not contain a holding that approves or rejects that kind of judicial or contractual tolling.
The complication is the way the statute measures the term. The 12-month maximum runs from termination, not from the last day of compliance, and the excess is void by statute.
A tolling clause that extends the effective restraint beyond 12 months after termination is therefore in tension with the statutory cap, even though no Oregon decision has tested such a clause directly. Treat the question as open and draft conservatively.
ORS 653.295(3) measures the 12-month maximum from the date of termination, not from the last day of compliance, and voids any term in excess of 12 months, so a tolling clause that pauses the non-compete during breach or litigation and pushes the effective restraint past 12 months after termination runs into the statutory cap and is void as to the excess. No Oregon statute or decision squarely approves or rejects such a clause, which leaves the fixed-from-termination cap as the controlling constraint on any tolling term .
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ORS 653.295(3) measures the 12-month maximum term from termination and voids any excess, which is in tension with a tolling clause that would extend the restraint beyond 12 months after termination.
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.
See ORS 653.295(3).
Are physician and other medical non-competes enforceable in Oregon?
Usually not. Under ORS 653.297, added by the 2025 legislation, a non-compete that restricts the practice of medicine or nursing is void and unenforceable between a medical licensee and a person, management services organization, or hospital, unless a narrow exception applies — most notably the licensee holding at least a 1.5 percent ownership interest. The companion provision reaches agreements entered before, on, or after the June 9, 2025 effective date. On a touch screen, a tap shows all 3 sources in this group.
This is Oregon's newest and most aggressive restriction, enacted as part of the 2025 corporate-practice-of-medicine package. The default rule voids medical-licensee non-competes outright.
The statute then provides exceptions, including one tied to a meaningful ownership stake in the entity.
The equity stake is not the only exception. A professional medical entity must provide the licensee documentation of recruitment costs equivalent to at least 20% of annual salary to use the investment route. The covenant term then must end no later than three years after hire, or five years after hire if the licensee directly provides care in an Oregon county designated as a health-professional shortage area. The statute also permits a covenant against a licensee who does not directly provide medical, health care, or clinical care. Each exception remains subject to ORS 653.295. On a touch screen, a tap shows all 3 sources in this group.
The reach is also retroactive. The 2025 law applies to qualifying medical-licensee agreements regardless of when they were signed.
ORS 653.297 restricts covenants that limit the practice of medicine or nursing by medical licensees, using the definition in ORS 676.555. On a touch screen, a tap shows all 2 sources in this group. It reaches agreements entered before, on, or after June 9, 2025, while preserving the statute's ownership, documented recruitment-investment, and nonclinical-work exceptions, subject to ORS 653.295. On a touch screen, a tap shows all 3 sources in this group.
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ORS 653.297(1)(c) defines medical licensee by reference to ORS 676.555.
“Medical licensee” has the meaning given that term in ORS 676.555.
See ORS 653.297(1)(c).
ORS 653.297(2)(a) voids a non-compete restricting the practice of medicine or nursing between a medical licensee and a person, management services organization, or hospital.
a noncompetition agreement that restricts the practice of medicine or the practice of nursing is void and unenforceable between a medical licensee and: (A) A person, as defined in ORS 442.015; (B) A management services organization; or (C) A hospital, as defined in ORS 442.015, or a hospital-affiliated clinic, as defined in ORS 442.612.
See ORS 653.297(2)(a).
ORS 653.297(2)(b)(A) allows a medical-licensee non-compete where the licensee holds an ownership or membership interest of at least 1.5 percent of the entity.
A noncompetition agreement between a medical licensee and another person that restricts the practice of medicine or the practice of nursing is valid and enforceable to the extent and under the terms provided in ORS 653.295 if: (A) The medical licensee is a shareholder or member of the other person or otherwise owns or controls an ownership or membership interest and the medical licensee's ownership or membership interest in the other person is equivalent to 1.5 percent or more of the entire ownership or membership interest that exists in the other person
See ORS 653.297(2)(b)(A).
ORS 653.297(1)(h) defines recruitment investment as costs equal to at least 20% of annual salary for specified recruiting and employment expenses.
“Recruitment investment” means costs to an entity that are equivalent to 20 percent or more of the annual salary of an employee with whom the entity has entered into a noncompetition agreement if the entity incurs the costs for: (A) Marketing to and recruiting the employee; (B) Providing the employee with a sign-on or relocation bonus; (C) Educating or training the employee in the entity’s procedures; (D) Providing support staff, technology acquisitions or upgrades and license fees related to the employee’s employment; or (E) Similar or related items.
See ORS 653.297(1)(h), (2)(b)(B) (as amended by H.B. 3410 (2025)).
ORS 653.297(2)(b)(B) requires documentation of the recruitment investment, limits the term to five years after hire for qualifying direct care in an Oregon shortage-area county, and otherwise limits it to three years after hire.
(B) The noncompetition agreement: (i) Is with a professional medical entity that provides the medical licensee with documentation of the professional medical entity’s recruitment investment; and (ii) Has a term that is not longer than: (I) Five years after the date on which the medical licensee was hired if the medical licensee engages directly in providing medical services, health care services or clinical care in a county of this state that is designated as a health professional shortage area, as defined in 42 U.S.C. 254e, as in effect on June 9, 2025; or (II) Three years after the date on which the medical licensee was hired if the medical licensee does not engage directly in providing medical services, health care services or clinical care as described in sub-sub-subparagraph (I) of this sub-subparagraph; or
See ORS 653.297(2)(b)(B).
ORS 653.297(2)(b)(C) permits a medical-licensee non-compete where the licensee does not engage directly in providing medical, health care, or clinical care.
The medical licensee does not engage directly in providing medical services, health care services or clinical care.
See ORS 653.297(2)(b)(C).
A 2025 session-law note applies ORS 653.297 and 653.298 to medical-licensee non-competes entered before, on, or after the June 9, 2025 effective date.
Sections 7 [653.297] and 8 [653.298], chapter 295, Oregon Laws 2025, apply to noncompetition agreements, as defined in section 7, chapter 295, Oregon Laws 2025, that restrict the practice of medicine or the practice of nursing and into which a medical licensee, as defined in section 7, chapter 295, Oregon Laws 2025, enters before, on or after the effective date of chapter 295, Oregon Laws 2025 [June 9, 2025].
See ORS 653.298 (2025 c.295 §9 note).
What is a bonus restriction agreement, and why does it matter?
It is a separate, expressly lawful tool that penalizes competition only by forfeiting unpaid bonus compensation. ORS 653.295 excludes bonus restriction agreements from the non-compete checklist and defines them so that the only penalty for competing is forfeiture of profit sharing or other bonus compensation not yet paid. On a touch screen, a tap shows all 2 sources in this group.
Because a bonus restriction agreement does not bar the employee from working, it sits outside the non-compete requirements. The statute makes these agreements lawful and allows Oregon courts to enforce them, but that statutory permission does not by itself guarantee enforceability — the agreement still has to satisfy the ordinary contract-law limits that apply to any term.
The defining feature is the limited penalty. The employee who competes loses only unpaid bonus money, not the ability to take a competing job.
A bonus restriction agreement sits outside the ORS 653.295 non-compete checklist only while its penalty for competition stays limited to forfeiture of unpaid profit sharing or bonus compensation; a forfeiture provision that reaches further — barring competing work or clawing back money already paid — loses the carve-out and is measured as a non-compete against the full statutory gates. On a touch screen, a tap shows all 2 sources in this group.
Sources for this answer
ORS 653.295(5)(a) excludes bonus restriction agreements from the non-compete requirements and confirms they are lawful and enforceable.
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.
See ORS 653.295(5)(a).
ORS 653.295(8)(a)(C) defines a bonus restriction agreement so that the penalty for competition is limited to forfeiture of unpaid profit sharing or bonus compensation.
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.
See ORS 653.295(8)(a)(C).
Can an out-of-state employer use a choice-of-law clause to avoid ORS 653.295, and what is the fee exposure?
Generally no. ORS 15.320 provides that an employment contract for services rendered primarily in Oregon by an Oregon resident is governed by Oregon law, which limits the use of a foreign choice-of-law clause to escape ORS 653.295. And ORS 20.096 makes one-sided contractual attorney-fee clauses reciprocal, so a prevailing employee can recover fees even if the contract named only the employer. On a touch screen, a tap shows all 2 sources in this group.
ORS 15.320 provides that, subject to the limitations in ORS 15.305, the law of Oregon applies to several listed categories of contracts. One of those categories is employment performed primarily in the state by an Oregon resident.
The fee statute then changes the litigation calculus. A contractual fee clause that runs in only one direction is made mutual by statute.
ORS 15.320(3) applies Oregon law to a contract of employment for services rendered primarily in Oregon by an Oregon resident, so an out-of-state choice-of-law clause does not carry a non-compete around ORS 653.295 for that employee. And ORS 20.096(1) gives a one-sided contractual attorney-fee clause reciprocal effect, so a prevailing employee recovers reasonable fees even under a provision the employer wrote to run only in its own favor. On a touch screen, a tap shows all 2 sources in this group.
Sources for this answer
ORS 15.320(3) provides that Oregon law governs a contract of employment for services rendered primarily in Oregon by an Oregon resident.
Notwithstanding any other provision of ORS 15.300 to 15.380, but subject to the limitations on applicability imposed by ORS 15.305, the law of Oregon applies to the following contracts: (1) A contract for services to be rendered in Oregon, or for goods to be delivered in Oregon, if Oregon or any of its agencies or subdivisions is a party to the contract. The application of Oregon's law pursuant to this subsection may be waived by a person authorized by Oregon's law to make the waiver. (2) A contract for construction work to be performed primarily in Oregon. (3) A contract of employment for services to be rendered primarily in Oregon by a resident of Oregon.
See ORS 15.320(3).
ORS 20.096(1) makes a one-sided contractual attorney-fee provision reciprocal, entitling the prevailing party to fees regardless of which party the contract specified.
the party that prevails on the claim shall be entitled to reasonable attorney fees in addition to costs and disbursements, without regard to whether the prevailing party is the party specified in the contract and without regard to whether the prevailing party is a party to the contract.
See ORS 20.096(1).
How do Oregon trade-secret protections and NDAs compare to non-competes?
They remain available and are often the better tool. Oregon has adopted the Uniform Trade Secrets Act, and ORS 653.295 preserves the right to protect trade secrets and proprietary information by other lawful means; but the Workplace Fairness Act limits using nondisclosure and nondisparagement provisions to suppress discrimination or harassment complaints. On a touch screen, a tap shows all 3 sources in this group.
Even where a non-compete is unavailable, the employer keeps its trade-secret remedies. Oregon's Uniform Trade Secrets Act defines the protected information.
The non-compete statute itself preserves these alternative protections.
Confidentiality and non-disparagement clauses have their own statutory limit. The Workplace Fairness Act makes it unlawful to use them to prevent an employee from discussing discrimination or harassment.
ORS 653.295(6) preserves the employer's trade-secret and proprietary-information remedies whatever happens to a non-compete, so confidentiality and trade-secret terms carry the secrecy interest on their own; but ORS 659A.370 makes a nondisclosure or nondisparagement provision an unlawful employment practice to the extent it has the purpose or effect of preventing an employee from disclosing or discussing discrimination, harassment, or sexual assault, so a confidentiality clause drawn wide enough to reach that conduct is unenforceable as to it. On a touch screen, a tap shows all 2 sources in this group.
Sources for this answer
ORS 646.461(4) defines a trade secret under the Oregon Uniform Trade Secrets Act by reference to independent economic value and reasonable secrecy efforts.
“Trade secret” means information, including a drawing, cost data, customer list, formula, pattern, compilation, program, device, method, technique or process that: (a) Derives independent economic value, actual or potential, from not being generally known to the public or to other persons who can obtain economic value from its disclosure or use; and (b) Is the subject of efforts that are reasonable under the circumstances to maintain its secrecy.
See ORS 646.461(4).
ORS 653.295(6) preserves the right to protect trade secrets and proprietary information by injunction or other lawful means even where a non-compete is restricted.
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.
See ORS 653.295(6).
ORS 659A.370(1) makes it an unlawful employment practice to require a nondisclosure or nondisparagement provision that prevents an employee from disclosing or discussing discrimination or harassment.
it is an unlawful employment practice for an employer to enter into an agreement with a former, current or prospective employee, as a condition of employment, continued employment, promotion, compensation or the receipt of benefits, that contains a nondisclosure provision, a nondisparagement provision or any other provision that has the purpose or effect of preventing the employee from disclosing or discussing conduct: (a)(A) That constitutes discrimination prohibited by ORS 659A.030, including conduct that constitutes sexual assault; or (B) That constitutes discrimination prohibited by ORS 659A.082 or 659A.112; and (b)(A) That occurred between employees or between an employer and an employee in the workplace or at a work-related event that is off the employment premises and coordinated by or through the employer; or (B) That occurred between an employer and an employee off the employment premises.
See ORS 659A.370(1).
What does federal law require a non-compete or confidentiality agreement in Oregon to say about whistleblowers and pay?
An employee confidentiality, non-compete, or invention assignment agreement signed or updated now that governs trade secrets or other confidential information must give the Defend Trade Secrets Act whistleblower-immunity notice, and for employees the National Labor Relations Act covers, Section 7 of that Act protects concerted activity, including joining together over pay and working conditions, that a broad confidentiality clause can restrict. The employer may satisfy the notice duty by cross-referencing a qualifying policy document provided to the employee, but an employer that omits the notice may not be awarded exemplary damages or attorney fees under the Defend Trade Secrets Act in an action against an employee who was not given notice.
The notice describes a federal immunity: an individual cannot be held liable under federal or state trade-secret law for disclosing a trade secret in confidence to a government official or an attorney solely to report or investigate a suspected violation of law, or in a court filing made under seal. For an agreement signed or updated now, the duty to give that notice reaches any agreement with an employee that governs trade secrets or other confidential information, whatever else the agreement does.
Section 7 gives employees the National Labor Relations Act covers a statutory right to engage in concerted activity for mutual aid or protection, including joining together to improve pay and working conditions. For employees the Act covers, the Board's work-rule standard adopted in 2023 makes a rule presumptively unlawful if it has a reasonable tendency to chill employees from exercising their Section 7 rights; an employer can rebut that presumption only by showing a legitimate and substantial business interest it cannot serve with a more narrowly tailored rule. The 2023 standard may change, but the Section 7 right it enforces is statutory. State law may add its own requirements for the same clauses.
A form carried over without the immunity notice, or a cross-reference to a reporting policy the employee never received, leaves the confidentiality clause without a valid notice, so the Act's exemplary damages and attorney fees are unavailable against that employee. A Confidential Information definition that sweeps in pay and working conditions with no carve-out exposes the employer to an unfair-labor-practice finding for employees the Act covers.
Sources for this answer
An individual is immune from criminal and civil liability under federal and state trade-secret law for disclosing a trade secret in confidence to a government official or an attorney solely to report or investigate a suspected violation of law, or in a court filing made under seal.
An individual shall not be held criminally or civilly liable under any Federal or State trade secret law for the disclosure of a trade secret that— (A) is made— (i) in confidence to a Federal, State, or local government official, either directly or indirectly, or to an attorney; and (ii) solely for the purpose of reporting or investigating a suspected violation of law; or (B) is made in a complaint or other document filed in a lawsuit or other proceeding, if such filing is made under seal.
See 18 U.S.C. § 1833(b)(1).
An employer must give notice of the trade-secret whistleblower immunity in any contract or agreement with an employee that governs the use of a trade secret or other confidential information.
An employer shall provide notice of the immunity set forth in this subsection in any contract or agreement with an employee that governs the use of a trade secret or other confidential information.
See 18 U.S.C. § 1833(b)(3)(A).
An employer complies with the notice requirement by cross-referencing a policy document, provided to the employee, that sets out the employer's reporting policy for a suspected violation of law.
An employer shall be considered to be in compliance with the notice requirement in subparagraph (A) if the employer provides a cross-reference to a policy document provided to the employee that sets forth the employer's reporting policy for a suspected violation of law.
See 18 U.S.C. § 1833(b)(3)(B).
An employer that does not give the required notice may not be awarded exemplary damages or attorney fees in a trade-secret action against an employee who did not receive it.
If an employer does not comply with the notice requirement in subparagraph (A), the employer may not be awarded exemplary damages or attorney fees under subparagraph (C) or (D) of section 1836(b)(3) in an action against an employee to whom notice was not provided.
See 18 U.S.C. § 1833(b)(3)(C).
Section 7 gives employees the right to engage in concerted activities for mutual aid or protection, the statutory basis for keeping discussion of pay and working conditions outside confidentiality restrictions.
Employees shall have the right to self-organization, to form, join, or assist labor organizations, to bargain collectively through representatives of their own choosing, and to engage in other concerted activities for the purpose of collective bargaining or other mutual aid or protection, and shall also have the right to refrain from any or all of such activities except to the extent that such right may be affected by an agreement requiring membership in a labor organization as a condition of employment as authorized in section 158(a)(3) of this title.
See 29 U.S.C. § 157 (NLRA § 7).
The National Labor Relations Board protects the right of private-sector employees, with or without a union, to join together to improve wages, benefits, and working conditions.
Established in 1935, the National Labor Relations Board is an independent federal agency that protects employees from unfair labor practices and protects the right of private sector employees to join together, with or without a union, to improve wages, benefits and working conditions.
See NLRB Office of Public Affairs, news release of Feb. 21, 2023 (agency mission statement).
Under the work-rule standard the Board adopted in 2023, a rule with a reasonable tendency to chill employees from exercising their Section 7 rights is presumptively unlawful unless the employer proves a legitimate and substantial business interest it cannot advance with a more narrowly tailored rule.
Under the new standard adopted in Stericycle, the General Counsel must prove that a challenged rule has a reasonable tendency to chill employees from exercising their rights. If the General Counsel does so, then the rule is presumptively unlawful. However, the employer may rebut the presumption by proving that the rule advances a legitimate and substantial business interest and that the employer is unable to advance that interest with a more narrowly tailored rule.
See Stericycle, Inc., 372 NLRB No. 113 (2023); NLRB Office of Public Affairs, Board Adopts New Standard for Assessing Lawfulness of Work Rules (Aug. 2, 2023).