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Employee Restrictive Covenant Agreement

Cover Terms

The terms below are incorporated into and form part of this agreement.

Employer[Legal name of the entity that employs the employee]
Employee[Full legal name of the employee]
Employee Title / Position
Effective Date[Effective date of this agreement — the date the last party signs. It anchors the duration presumptions stated in Cover Terms.]
Governing LawOregon
Confidentiality
Trade Secrets DurationPerpetual
Other Confidential Information Duration24 months
Employee Non-Solicitation
Duration24 months
Market benchmark (based on 76 companies)HideShow
TermFrequency
12 months44.7%
Selected default24 months34.9%
18 months11.2%
Why this selected default?

Why is this the selected default?

24 months matches the modal employee non-solicit term observed in benchmarked, publicly-filed employee agreements; 12 months is the common lighter alternative. The Act sets no express duration presumption for the no-hire category, so the uniquely-essential scope limit does the primary category work; counsel should size the term to the workforce interest actually protected.

Customer Non-Solicitation
Duration12 months
State-law basis 12 months

Reference only — not part of this agreement.

12 months sits well inside the presumptively reasonable window for a current-customer non-solicit: eighteen months, or for as long as post-separation consideration is paid, whichever is greater. Counsel may extend toward eighteen months, or longer while post-separation consideration is paid, where the interest supports it.

No Business with Covered Customers
Duration12 months
State-law basis 12 months

Reference only — not part of this agreement.

12 months sits within the current-customer window. Because non-dealing has no category of its own, it is drawn to fit inside the current-customer non-solicit exception, and its duration tracks that category's presumption.

Non-Investment
Duration12 months
Non-Disparagement
Duration24 months

Standard Terms

1. Defined Terms

“Competitive Business” means the business activities described in Cover Terms under Competitive Business.

“Confidential Information” means non-public information relating to Employer's business, including trade secrets, competitively sensitive confidential business or professional information that would not qualify as a trade secret, product development plans, product launch plans, marketing strategy, sales plans, customer lists, and pricing, but excluding information that becomes public through no fault of Employee.

“Covered Customers” means customers of Employer with whom Employee had an active or ongoing relationship — including material contact or responsibility — during the 12 months before termination of employment, and does not include former or merely incidental patrons.

“Covered Employees” means employees with whom Employee worked or whom Employee managed during the 12 months before termination of employment.

“Passive Public Holdings” means ownership of securities of a publicly traded company representing less than five percent of any class of such company's securities, and interests in diversified mutual funds, index funds, and exchange-traded funds that may hold securities of a Competitive Business.

“Protected Interests” means Employer's Trade Secrets and competitively sensitive Confidential Information, including product development plans, product launch plans, marketing strategy, and sales plans.

“Restricted Period” means the duration specified in Cover Terms for each covenant, beginning on the date Employee's employment with Employer ends for any reason.

“Restricted Territory” means the geographic area described in Cover Terms under Restricted Territory.

“Solicit” means to directly or indirectly contact, approach, induce, encourage, or provide Confidential Information to any person or entity for the purpose of diverting business away from Employer, but does not include responding to general advertisements or unsolicited inquiries not initiated by Employee.

“Trade Secrets” means information qualifying as a trade secret under applicable law.

2. Recitals and Statutory Protectable Interest

Employer and Employee acknowledge that each restrictive covenant in this agreement is ancillary to a valid employment relationship and protects one or more of Employer's Protected Interests. Employee will receive access to Employer's Protected Interests, and Employer would not provide that access absent the protections in this agreement. Employee acknowledges that the covenants are reasonable and necessary to protect Employer's Protected Interests.

Drafting Note Statutory protectable interest

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 .

3. Timing and Formation of the Non-Competition Covenant

If this agreement includes a covenant not to compete, Employee acknowledges either that Employee received a written employment offer stating that the covenant was required at least two weeks before employment began or that Employee enters into the covenant upon a bona fide advancement. Employer has advised Employee that Employee may consult with an attorney before entering into this agreement. Employee acknowledges that the restrictions in this agreement are reasonable and necessary to protect Employer's Protected Interests. This agreement is effective as of the Effective Date listed in Cover Terms.

Drafting Note Non-compete formation timing

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 .

4. Confidential Information and Trade Secret Protection

Employee must treat all Confidential Information as strictly confidential. Employee must not use or disclose Confidential Information except as required to perform authorized job duties or with Employer's prior written consent. Employee's obligations regarding trade secrets continue in perpetuity. Employee's obligations regarding other Confidential Information continue for the period specified in Cover Terms. Nothing in this section, and nothing in this agreement, restricts the right of Employer to protect trade secrets or other proprietary information by injunction or any other lawful means under other applicable laws.

5. Permitted Disclosures and Protected Conduct

Nothing in this agreement prohibits Employee from: (a) reporting possible violations of law to any government agency, including the Securities and Exchange Commission, the Equal Employment Opportunity Commission, the Occupational Safety and Health Administration, the Oregon Bureau of Labor and Industries, or any other federal, state, or local agency; (b) making disclosures protected under whistleblower provisions of any law; (c) discussing wages, hours, or other terms and conditions of employment as protected by applicable law; (d) disclosing or discussing conduct that constitutes discrimination, harassment, or sexual assault, as protected Under the Oregon Workplace Fairness Act, ORS 659A.370; (e) testifying truthfully in legal proceedings; or (f) filing a sealed complaint in court using Confidential Information without liability. Pursuant to the Defend Trade Secrets Act (18 U.S.C. § 1833(b)), Employee may not be held criminally or civilly liable for disclosing a trade secret in confidence to a government official or attorney solely for the purpose of reporting or investigating a suspected violation of law, or in a sealed court filing.

6. Return, Deletion, and Certification of Company Property

Upon termination of employment, Employee must promptly return to Employer all documents, devices, files, credentials, and other materials containing or relating to Confidential Information. Where permitted, Employee must permanently delete electronic copies of Confidential Information from personal devices and accounts. Employee must certify compliance with this section in writing upon Employer's request. Employer will provide Employee a signed copy of any noncompetition covenant within 30 days after termination.

7. Non-Solicitation of Employees

During the Restricted Period, Employee must not Solicit, recruit, hire, or attempt to hire any Covered Employee. This restriction does not prohibit Employee from providing a professional reference upon request or from hiring a person who responds to a general advertisement not directed specifically at Employer's employees. This restriction applies only to Covered Employees during the Restricted Period (ORS 653.295(5)(b)).

8. Non-Solicitation of Customers, Vendors, Referral Sources, and Business Partners

During the Restricted Period, Employee must not Solicit the business of any Covered Customer. The Covered Customers class is limited to customers with an active or ongoing relationship with Employer and does not include former or merely incidental patrons.

Drafting Note Customer non-solicitation scope

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 .

9. No Business with Covered Customers

During the Restricted Period, Employee must not accept, service, or do business with any Covered Customer, regardless of whether Employee or the Covered Customer first initiated contact. This restriction applies only to Covered Customers with an active or ongoing relationship with Employer and excludes former or incidental patrons.

10. Non-Investment

During the Restricted Period, Employee must not acquire or hold any active ownership interest in, serve as a director, officer, manager, or advisor to, or have material economic participation in any Competitive Business. This restriction is subject to the same conditions and Restricted Period as the Non-Competition covenant. Passive Public Holdings are permitted.

11. Non-Disparagement

During the Restricted Period specified in Cover Terms for Non-Disparagement, Employee must not make statements that are intended to or reasonably likely to disparage Employer, its officers, directors, employees, products, or services. This section does not restrict Employee from making truthful statements in legal proceedings, providing truthful testimony, making disclosures to government agencies, exercising rights protected by law, or disclosing or discussing conduct that constitutes discrimination, harassment, or sexual assault. Under the Oregon Workplace Fairness Act, ORS 659A.370(1), no provision of this agreement has the purpose or effect of preventing Employee from disclosing or discussing such conduct.

12. Oregon Workplace Fairness Act

Notwithstanding any other provision of this agreement, no nondisclosure provision, nondisparagement provision, or other provision of this agreement has the purpose or effect of preventing Employee — as a former, current, or prospective employee — from disclosing or discussing conduct that constitutes discrimination prohibited by ORS 659A.030 (including conduct that constitutes sexual assault) or by ORS 659A.082 or 659A.112, that occurred between employees, or between an employer and an employee, in the workplace or at a work-related event, or off the employment premises, as provided in ORS 659A.370(1). Confidentiality obligations under this agreement remain scoped to Employer's trade-secret and proprietary-information interests.

Drafting Note Confidentiality and Workplace Fairness Act

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 .

13. Medical-Licensee Non-Competition Exclusion

No covenant in this agreement restricts Employee's practice of medicine or nursing where applicable law prohibits that restriction.

14. No Conflicting Obligations

Employee represents that performing duties for Employer and complying with this agreement does not conflict with any prior agreement, court order, or legal obligation binding on Employee. Employee must promptly disclose to Employer any potential conflict that arises during employment.

15. Notice to Future Employers and Other Third Parties

Employer may disclose the existence and terms of this agreement to a prospective employer or business associate of Employee only if Employer has a reasonable belief that Employee may breach an enforceable restrictive covenant in this agreement. Employee consents to disclosure permitted by this section.

16. Tolling During Breach

If Employee breaches a restrictive covenant other than the non-compete, the Restricted Period for that covenant is extended by one day for each day of the breach. Tolling will not extend the non-compete beyond 12 months after termination.

Drafting Note Tolling against the 12-month-from-termination cap

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 .

17. Remedies

Employee acknowledges that a breach of this agreement may cause Employer irreparable harm for which money damages would be inadequate. Employer may seek injunctive or other lawful relief to protect its Trade Secrets and proprietary information. The prevailing party in an enforcement action is entitled to reasonable attorney fees, costs, and disbursements.

Drafting Note Reciprocal effect of a one-way fee clause

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 .

18. Survival and Expiration of Each Covenant

Each restrictive covenant in this agreement survives the termination of Employee's employment for the Restricted Period specified in Cover Terms. The non-compete expires no later than 12 months after termination. Obligations under the Confidential Information and Trade Secret Protection section survive for the Trade Secrets Duration specified in Cover Terms to the extent they relate to trade secrets, and for the Other Confidential Information Duration specified in Cover Terms for other Confidential Information. All other provisions survive to the extent necessary to enforce rights that arose during employment.

19. Assignment and Successors

Employee may not assign this agreement or any rights or obligations under it. Employer may assign this agreement to any affiliate, successor, or acquirer of all or substantially all of Employer's business or assets. Assignment does not expand a covenant or eliminate any condition applicable to its enforcement. This agreement is binding on and inures to the benefit of the parties and their respective heirs, successors, and permitted assigns.

20. Governing Law, Venue, and Dispute Process

This agreement is governed by the law listed in Cover Terms. Oregon law governs to the extent required by non-waivable law. Disputes will be resolved in the courts of the Governing Law state, subject to non-waivable rights under applicable law.

21. Entire Agreement, Amendment, Waiver, and Electronic Signatures

This agreement constitutes the entire agreement between the parties regarding its subject matter and supersedes all prior agreements, understandings, and negotiations on this subject. Any amendment introducing or expanding a non-compete is effective only if executed in connection with a bona fide advancement or other formation event permitted by applicable law. This agreement may otherwise be amended only in writing signed by both parties. A party's failure to enforce any provision does not waive that party's right to enforce it later. This agreement may be executed in counterparts, including by electronic signature, each of which is an original.

Signatures

By signing this agreement, each party acknowledges and agrees to the restrictive covenant obligations above. Employee confirms having read and understood each provision, including the Cover Terms.

Employer

Employer: [Legal name of the entity that employs the employee]

Signature:

Signatory Name: [Full name of the authorized signatory signing for the employer]

Title: [Title of the authorized signatory signing for the employer]

Date:

Employee

Signature:

Print Name: [Full legal name of the employee]

Date:

Adapted from OpenAgreements Wyoming and Florida restrictive covenant templates. Licensed under CC BY 4.0.