{ "type": "practice-guide", "canonical": "https://openagreements.org/practice-guides/non-compete/us/oregon", "links": [ { "rel": "self", "href": "https://openagreements.org/practice-guides/non-compete/us/oregon.json", "type": "application/json" }, { "rel": "alternate", "href": "https://openagreements.org/practice-guides/non-compete/us/oregon", "type": "text/html" }, { "rel": "alternate", "href": "https://openagreements.org/practice-guides/non-compete/us/oregon/markdown", "type": "text/markdown" }, { "rel": "alternate", "href": "https://openagreements.org/practice-guides/non-compete/us/oregon/json", "type": "application/json" } ], "data": { "topic": "non-compete", "state": "oregon", "frontmatter": { "title": "Non-Competes in Oregon", "description": "A question-by-question summary of Oregon non-compete law, including ORS 653.295, the two-week notice rule, the exempt-employee salary threshold, the 12-month cap, garden-leave pay, void-not-voidable treatment, non-solicitation covenants, the 2025 medical-licensee ban, choice of law, and trade-secret alternatives.", "state": "Oregon", "lastReviewed": "2026-06-03", "license": "CC BY 4.0", "authors": [ "steven-obiajulu" ], "summary": { "enforceability": "payThreshold", "bottomLine": "An Oregon employee non-compete is void by default unless the employer meets a strict ORS 653.295 checklist — including pay above an inflation-indexed threshold ($119,541 for 2026) — or pays garden leave.", "keyLaw": "ORS 653.295", "exceptions": "Medical-licensee (physician/nurse) ban (ORS 653.297, 2025, retroactive); non-solicit/bonus/sale-of-business outside the checklist; garden-leave path", "banEffectiveDate": "Salary threshold & 12-mo cap eff. Jan 1, 2022; medical-licensee ban eff. June 9, 2025", "courtNarrowing": "no", "appliesToContractors": "unclear", "extendedForBreach": "Silent — 12-month-from-termination cap cuts against tolling", "maxLength": "12 months from termination (excess void)", "noticeRequirement": "Written notice at least 2 weeks before first day", "incomeThreshold": "$119,541 (2026)", "saleOfBusiness": "Outside ORS 653.295 checklist", "customerNonSolicit": "Outside ORS 653.295 checklist", "employeeNonSolicit": "Outside ORS 653.295 checklist", "employerPayToEnforce": "payDuringRestriction" }, "about": [ "Oregon non-compete agreements", "ORS 653.295 noncompetition agreements", "Oregon two-week advance notice requirement", "Oregon exempt-employee salary threshold", "Oregon 12-month non-compete cap", "Oregon garden-leave pay-to-enforce option", "Oregon void versus voidable non-competes", "Oregon non-solicitation covenants", "Oregon medical licensee non-compete ban (SB 951 and HB 3410)", "Oregon Uniform Trade Secrets Act" ], "translations": [ { "language": "中文", "status": "planned" }, { "language": "Español", "status": "planned" }, { "language": "Português", "status": "planned" }, { "language": "Deutsch", "status": "planned" } ], "relatedForm": { "slug": "openagreements-restrictive-covenant-oregon" } }, "questions": [ { "slug": "employee-non-compete-enforceability", "label": "Are employee non-competes enforceable?", "heading": "Are employee non-compete agreements enforceable in Oregon?", "answerText": "Sometimes, but only if the employer satisfies a strict statutory checklist. Under ORS 653.295, a non-compete is void and unenforceable unless the employer gave advance written notice or secured the covenant on a bona fide advancement, the employee is an exempt salaried worker who clears an annual income threshold, the employer has a protectable interest, and the employer delivers a signed copy within 30 days of termination — subject to the garden-leave and on-air-broadcasting paths discussed below.", "sources": [ { "id": "q1-ors-653-295-void-unless", "authorityType": "primary-law", "tier": "primary-source-backed", "title": "ORS 653.295", "citation": "ORS 653.295(1).", "url": "https://www.oregonlegislature.gov/bills_laws/ors/ors653.html", "proposition": "ORS 653.295(1) makes an Oregon employee non-compete void and unenforceable by default, with the first requirement being two weeks' advance written notice or a subsequent bona fide advancement.", "verbatimQuote": "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", "anchor": "https://openagreements.org/practice-guides/non-compete/us/oregon#src-q1-ors-653-295-void-unless" } ] }, { "slug": "valid-requirements", "label": "What must a valid covenant satisfy?", "heading": "What must a valid Oregon non-compete satisfy?", "answerText": "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.", "sources": [ { "id": "q2-ors-653-295-conditions", "authorityType": "primary-law", "tier": "primary-source-backed", "title": "ORS 653.295", "citation": "ORS 653.295(1)(b)-(e).", "url": "https://www.oregonlegislature.gov/bills_laws/ors/ors653.html", "proposition": "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.", "verbatimQuote": "(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.", "anchor": "https://openagreements.org/practice-guides/non-compete/us/oregon#src-q2-ors-653-295-conditions" }, { "id": "q2-boli-conditions", "authorityType": "primary-law", "tier": "primary-source-backed", "title": "Oregon BOLI, Noncompetition Agreements", "citation": "Oregon BOLI, Noncompetition Agreements.", "url": "https://www.oregon.gov/boli/employers/pages/noncompetition-agreements.aspx", "proposition": "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.", "verbatimQuote": "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.", "anchor": "https://openagreements.org/practice-guides/non-compete/us/oregon#src-q2-boli-conditions" } ] }, { "slug": "salary-threshold", "label": "Which employees can be bound?", "heading": "Which Oregon employees earn enough to be bound by a non-compete?", "answerText": "Only exempt salaried employees whose annual gross salary and commissions exceed an inflation-indexed dollar threshold. The baseline set when the 2021 amendments took effect was $100,533, adjusted each year for inflation; the labor agency publishes the figure annually, and for 2026 the amount the employee's pay must exceed is $119,541.", "sources": [ { "id": "q3-ors-653-295-threshold", "authorityType": "primary-law", "tier": "primary-source-backed", "title": "ORS 653.295", "citation": "ORS 653.295(1)(e).", "url": "https://www.oregonlegislature.gov/bills_laws/ors/ors653.html", "proposition": "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.", "verbatimQuote": "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.", "anchor": "https://openagreements.org/practice-guides/non-compete/us/oregon#src-q3-ors-653-295-threshold" }, { "id": "q3-boli-threshold", "authorityType": "primary-law", "tier": "primary-source-backed", "title": "Oregon BOLI, Noncompetition Agreements", "citation": "Oregon BOLI, Noncompetition Agreements.", "url": "https://www.oregon.gov/boli/employers/pages/noncompetition-agreements.aspx", "proposition": "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.", "verbatimQuote": "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.", "anchor": "https://openagreements.org/practice-guides/non-compete/us/oregon#src-q3-boli-threshold" } ] }, { "slug": "garden-leave", "label": "Can an employer pay to bind a lower-paid worker?", "heading": "Can an Oregon employer enforce a non-compete against a worker below the salary threshold by paying during the restraint?", "answerText": "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.", "sources": [ { "id": "q4-ors-653-295-garden-leave", "authorityType": "primary-law", "tier": "primary-source-backed", "title": "ORS 653.295", "citation": "ORS 653.295(7).", "url": "https://www.oregonlegislature.gov/bills_laws/ors/ors653.html", "proposition": "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.", "verbatimQuote": "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.", "anchor": "https://openagreements.org/practice-guides/non-compete/us/oregon#src-q4-ors-653-295-garden-leave" }, { "id": "q4-boli-garden-leave", "authorityType": "primary-law", "tier": "primary-source-backed", "title": "Oregon BOLI, Noncompetition Agreements", "citation": "Oregon BOLI, Noncompetition Agreements.", "url": "https://www.oregon.gov/boli/employers/pages/noncompetition-agreements.aspx", "proposition": "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.", "verbatimQuote": "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.", "anchor": "https://openagreements.org/practice-guides/non-compete/us/oregon#src-q4-boli-garden-leave" } ] }, { "slug": "duration-limits", "label": "How long can a non-compete last?", "heading": "How long can an Oregon non-compete last?", "answerText": "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.", "sources": [ { "id": "q5-ors-653-295-duration", "authorityType": "primary-law", "tier": "primary-source-backed", "title": "ORS 653.295", "citation": "ORS 653.295(3).", "url": "https://www.oregonlegislature.gov/bills_laws/ors/ors653.html", "proposition": "ORS 653.295(3) caps an Oregon non-compete at 12 months from termination and voids any portion of the term beyond 12 months.", "verbatimQuote": "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.", "anchor": "https://openagreements.org/practice-guides/non-compete/us/oregon#src-q5-ors-653-295-duration" } ] }, { "slug": "timing-advancement", "label": "When must the covenant be signed?", "heading": "When must an Oregon non-compete be signed to be valid?", "answerText": "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.", "sources": [ { "id": "q6-ors-653-295-timing", "authorityType": "primary-law", "tier": "primary-source-backed", "title": "ORS 653.295", "citation": "ORS 653.295(1)(a).", "url": "https://www.oregonlegislature.gov/bills_laws/ors/ors653.html", "proposition": "ORS 653.295(1)(a) requires either two weeks' advance written notice before the first day of employment or a subsequent bona fide advancement.", "verbatimQuote": "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", "anchor": "https://openagreements.org/practice-guides/non-compete/us/oregon#src-q6-ors-653-295-timing" }, { "id": "q6-nike-timing", "authorityType": "case-law", "tier": "primary-source-backed", "title": "Nike, Inc. v. McCarthy", "citation": "Nike, Inc. v. McCarthy, 379 F.3d 576 (9th Cir. 2004).", "url": "https://www.courtlistener.com/opinion/787342/nike-inc-v-eugene-mccarthy/", "deepLink": "https://www.courtlistener.com/opinion/787342/nike-inc-v-eugene-mccarthy/#:~:text=Construing%20the%20Oregon%20statute%20and,statutory%20requirements%20to%20be%20enforceable.", "proposition": "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.", "verbatimQuote": "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.", "date": "2004-08-09", "anchor": "https://openagreements.org/practice-guides/non-compete/us/oregon#src-q6-nike-timing" } ] }, { "slug": "protectable-interest", "label": "What is a protectable interest?", "heading": "What counts as a protectable interest under Oregon's non-compete statute?", "answerText": "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.", "sources": [ { "id": "q7-ors-653-295-interest", "authorityType": "primary-law", "tier": "primary-source-backed", "title": "ORS 653.295", "citation": "ORS 653.295(2).", "url": "https://www.oregonlegislature.gov/bills_laws/ors/ors653.html", "proposition": "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.", "verbatimQuote": "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", "anchor": "https://openagreements.org/practice-guides/non-compete/us/oregon#src-q7-ors-653-295-interest" }, { "id": "q7-ors-653-295-broadcast", "authorityType": "primary-law", "tier": "primary-source-backed", "title": "ORS 653.295", "citation": "ORS 653.295(2)(c).", "url": "https://www.oregonlegislature.gov/bills_laws/ors/ors653.html", "proposition": "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.", "verbatimQuote": "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", "anchor": "https://openagreements.org/practice-guides/non-compete/us/oregon#src-q7-ors-653-295-broadcast" }, { "id": "q7-nike-interest", "authorityType": "case-law", "tier": "primary-source-backed", "title": "Nike, Inc. v. McCarthy", "citation": "Nike, Inc. v. McCarthy, 379 F.3d 576 (9th Cir. 2004).", "url": "https://www.courtlistener.com/opinion/787342/nike-inc-v-eugene-mccarthy/", "deepLink": "https://www.courtlistener.com/opinion/787342/nike-inc-v-eugene-mccarthy/#:~:text=We%20also%20hold%20that%20Nike,information%20McCarthy%20acquired%20at%20Nike.", "proposition": "Nike v. McCarthy found a legitimate interest supporting enforcement where a departing executive had access to highly confidential strategic information a competitor could exploit.", "verbatimQuote": "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.", "date": "2004-08-09", "anchor": "https://openagreements.org/practice-guides/non-compete/us/oregon#src-q7-nike-interest" } ] }, { "slug": "void-vs-voidable", "label": "Void or voidable? Can courts blue-pencil?", "heading": "Is a defective Oregon non-compete void or merely voidable, and can a court fix it?", "answerText": "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.", "sources": [ { "id": "q8-ors-653-295-void", "authorityType": "primary-law", "tier": "primary-source-backed", "title": "ORS 653.295", "citation": "ORS 653.295(3).", "url": "https://www.oregonlegislature.gov/bills_laws/ors/ors653.html", "proposition": "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.", "verbatimQuote": "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.", "anchor": "https://openagreements.org/practice-guides/non-compete/us/oregon#src-q8-ors-653-295-void" }, { "id": "q8-bernard-voidable", "authorityType": "case-law", "tier": "primary-source-backed", "title": "Bernard v. S.B., Inc.", "citation": "Bernard v. S.B., Inc., 270 Or. App. 710 (2015).", "url": "https://www.courtlistener.com/opinion/8166117/bernard-v-sb-inc/", "deepLink": "https://www.courtlistener.com/opinion/8166117/bernard-v-sb-inc/#:~:text=As%20explained%20below%2C%20we%20conclude,time%20that%20defendant%20invoked%20it.", "proposition": "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.", "verbatimQuote": "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.", "date": "2015-05-06", "anchor": "https://openagreements.org/practice-guides/non-compete/us/oregon#src-q8-bernard-voidable" } ] }, { "slug": "nonsolicitation", "label": "Are non-solicitation covenants treated differently?", "heading": "Are non-solicitation covenants treated differently in Oregon?", "answerText": "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.", "sources": [ { "id": "q9-ors-653-295-carveout", "authorityType": "primary-law", "tier": "primary-source-backed", "title": "ORS 653.295", "citation": "ORS 653.295(5).", "url": "https://www.oregonlegislature.gov/bills_laws/ors/ors653.html", "proposition": "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).", "verbatimQuote": "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.", "anchor": "https://openagreements.org/practice-guides/non-compete/us/oregon#src-q9-ors-653-295-carveout" }, { "id": "q9-henry-partial", "authorityType": "case-law", "tier": "primary-source-backed", "title": "Oregon Psychiatric Partners, LLP v. Henry", "citation": "Oregon Psychiatric Partners, LLP v. Henry, 293 Or. App. 471, 429 P.3d 399 (2018).", "url": "https://www.courtlistener.com/opinion/6657507/or-psychiatric-partners-llp-v-henry/", "deepLink": "https://www.courtlistener.com/opinion/6657507/or-psychiatric-partners-llp-v-henry/#:~:text=For%20the%20reasons%20that%20follow%2C,factual%20issues%20that%20may%20remain.", "proposition": "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.", "verbatimQuote": "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.", "date": "2018-08-22", "anchor": "https://openagreements.org/practice-guides/non-compete/us/oregon#src-q9-henry-partial" }, { "id": "q9-henry-customers", "authorityType": "case-law", "tier": "primary-source-backed", "title": "Oregon Psychiatric Partners, LLP v. Henry", "citation": "Oregon Psychiatric Partners, LLP v. Henry, 293 Or. App. 471, 429 P.3d 399 (2018).", "url": "https://www.courtlistener.com/opinion/6657507/or-psychiatric-partners-llp-v-henry/", "deepLink": "https://www.courtlistener.com/opinion/6657507/or-psychiatric-partners-llp-v-henry/#:~:text=Those%20definitions%20support%20defendant's%20contention,former%20or%20merely%20incidental%20patrons.", "proposition": "Oregon Psychiatric Partners v. Henry construed customers of the employer to mean people with an active or ongoing relationship, not former or incidental patrons.", "verbatimQuote": "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.", "date": "2018-08-22", "anchor": "https://openagreements.org/practice-guides/non-compete/us/oregon#src-q9-henry-customers" } ] }, { "slug": "sale-of-business", "label": "Does the statute cover sale-of-business covenants?", "heading": "Does ORS 653.295 apply to sale-of-business and owner covenants in Oregon?", "answerText": "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.", "sources": [ { "id": "q9b-ors-653-295-employment-only", "authorityType": "primary-law", "tier": "primary-source-backed", "title": "ORS 653.295", "citation": "ORS 653.295(4).", "url": "https://www.oregonlegislature.gov/bills_laws/ors/ors653.html", "proposition": "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.", "verbatimQuote": "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.", "anchor": "https://openagreements.org/practice-guides/non-compete/us/oregon#src-q9b-ors-653-295-employment-only" } ] }, { "slug": "extended-for-breach", "label": "Does tolling extend the period?", "heading": "Does an Oregon non-compete toll or extend during breach or litigation?", "answerText": "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.", "sources": [ { "id": "q10-ors-653-295-cap", "authorityType": "primary-law", "tier": "primary-source-backed", "title": "ORS 653.295", "citation": "ORS 653.295(3).", "url": "https://www.oregonlegislature.gov/bills_laws/ors/ors653.html", "proposition": "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.", "verbatimQuote": "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.", "anchor": "https://openagreements.org/practice-guides/non-compete/us/oregon#src-q10-ors-653-295-cap" } ] }, { "slug": "healthcare-licensees", "label": "What about physician and medical non-competes?", "heading": "Are physician and other medical non-competes enforceable in Oregon?", "answerText": "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.", "sources": [ { "id": "q11-ors-653-297-ban", "authorityType": "primary-law", "tier": "primary-source-backed", "title": "ORS 653.297", "citation": "ORS 653.297(2)(a).", "url": "https://www.oregonlegislature.gov/bills_laws/ors/ors653.html", "proposition": "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.", "verbatimQuote": "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.", "anchor": "https://openagreements.org/practice-guides/non-compete/us/oregon#src-q11-ors-653-297-ban" }, { "id": "q11-ors-653-297-equity", "authorityType": "primary-law", "tier": "primary-source-backed", "title": "ORS 653.297", "citation": "ORS 653.297(2)(b)(A).", "url": "https://www.oregonlegislature.gov/bills_laws/ors/ors653.html", "proposition": "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.", "verbatimQuote": "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", "anchor": "https://openagreements.org/practice-guides/non-compete/us/oregon#src-q11-ors-653-297-equity" }, { "id": "q11-ors-653-297-nonclinical", "authorityType": "primary-law", "tier": "primary-source-backed", "title": "ORS 653.297", "citation": "ORS 653.297(2)(b)(C).", "url": "https://www.oregonlegislature.gov/bills_laws/ors/ors653.html", "proposition": "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.", "verbatimQuote": "The medical licensee does not engage directly in providing medical services, health care services or clinical care.", "anchor": "https://openagreements.org/practice-guides/non-compete/us/oregon#src-q11-ors-653-297-nonclinical" }, { "id": "q11-ors-653-298-retro", "authorityType": "primary-law", "tier": "primary-source-backed", "title": "ORS 653.298", "citation": "ORS 653.298 (2025 c.295 §9 note).", "url": "https://www.oregonlegislature.gov/bills_laws/ors/ors653.html", "proposition": "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.", "verbatimQuote": "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].", "anchor": "https://openagreements.org/practice-guides/non-compete/us/oregon#src-q11-ors-653-298-retro" } ] }, { "slug": "bonus-restriction", "label": "What is a bonus restriction agreement?", "heading": "What is a bonus restriction agreement, and why does it matter?", "answerText": "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.", "sources": [ { "id": "q12-ors-653-295-bonus-carveout", "authorityType": "primary-law", "tier": "primary-source-backed", "title": "ORS 653.295", "citation": "ORS 653.295(5)(a).", "url": "https://www.oregonlegislature.gov/bills_laws/ors/ors653.html", "proposition": "ORS 653.295(5)(a) excludes bonus restriction agreements from the non-compete requirements and confirms they are lawful and enforceable.", "verbatimQuote": "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.", "anchor": "https://openagreements.org/practice-guides/non-compete/us/oregon#src-q12-ors-653-295-bonus-carveout" }, { "id": "q12-ors-653-295-bonus-def", "authorityType": "primary-law", "tier": "primary-source-backed", "title": "ORS 653.295", "citation": "ORS 653.295(8)(a)(C).", "url": "https://www.oregonlegislature.gov/bills_laws/ors/ors653.html", "proposition": "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.", "verbatimQuote": "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.", "anchor": "https://openagreements.org/practice-guides/non-compete/us/oregon#src-q12-ors-653-295-bonus-def" } ] }, { "slug": "choice-of-law-and-fees", "label": "Can an out-of-state employer dodge Oregon law?", "heading": "Can an out-of-state employer use a choice-of-law clause to avoid ORS 653.295, and what is the fee exposure?", "answerText": "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.", "sources": [ { "id": "q13-ors-15-320", "authorityType": "primary-law", "tier": "primary-source-backed", "title": "ORS 15.320", "citation": "ORS 15.320(3).", "url": "https://www.oregonlegislature.gov/bills_laws/ors/ors015.html", "proposition": "ORS 15.320(3) provides that Oregon law governs a contract of employment for services rendered primarily in Oregon by an Oregon resident.", "verbatimQuote": "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.", "anchor": "https://openagreements.org/practice-guides/non-compete/us/oregon#src-q13-ors-15-320" }, { "id": "q13-ors-20-096", "authorityType": "primary-law", "tier": "primary-source-backed", "title": "ORS 20.096", "citation": "ORS 20.096(1).", "url": "https://www.oregonlegislature.gov/bills_laws/ors/ors020.html", "proposition": "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.", "verbatimQuote": "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.", "anchor": "https://openagreements.org/practice-guides/non-compete/us/oregon#src-q13-ors-20-096" } ] }, { "slug": "trade-secrets-ndas", "label": "Are trade-secret and NDA tools available?", "heading": "How do Oregon trade-secret protections and NDAs compare to non-competes?", "answerText": "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.", "sources": [ { "id": "q14-ors-646-461-trade-secret", "authorityType": "primary-law", "tier": "primary-source-backed", "title": "ORS 646.461", "citation": "ORS 646.461(4).", "url": "https://www.oregonlegislature.gov/bills_laws/ors/ors646.html", "proposition": "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.", "verbatimQuote": "“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.", "anchor": "https://openagreements.org/practice-guides/non-compete/us/oregon#src-q14-ors-646-461-trade-secret" }, { "id": "q14-ors-653-295-preserve", "authorityType": "primary-law", "tier": "primary-source-backed", "title": "ORS 653.295", "citation": "ORS 653.295(6).", "url": "https://www.oregonlegislature.gov/bills_laws/ors/ors653.html", "proposition": "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.", "verbatimQuote": "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.", "anchor": "https://openagreements.org/practice-guides/non-compete/us/oregon#src-q14-ors-653-295-preserve" }, { "id": "q14-ors-659a-370-wfa", "authorityType": "primary-law", "tier": "primary-source-backed", "title": "ORS 659A.370", "citation": "ORS 659A.370(1).", "url": "https://www.oregonlegislature.gov/bills_laws/ors/ors659A.html", "proposition": "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.", "verbatimQuote": "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.", "anchor": "https://openagreements.org/practice-guides/non-compete/us/oregon#src-q14-ors-659a-370-wfa" } ] } ] } }