Change to Oregon’s Non-Compete Statute

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In mid-May, HB 2992 was signed into law.  HB 2992 amends the Oregon statute governing non-competition agreements (ORS 653.295) to add another basis to void a non-compete.  The amendment provides that, beginning January 1, 2020, a non-competition agreement is voidable and may not be enforced unless:

(e) 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.

If you follow legal developments related to ORS 653.295, you know that Oregon courts have held that an employee must take affirmative steps to void a non-compete before their employer undertakes an effort to enforce or invoke the non-compete.  If the employee does not take such steps, the employee can lose the ability to claim a non-compete is void for failure to comply with ORS 652.295.

Presumably, this amendment is intended to make sure an employee has a copy of their non-compete so the employee can take affirmative steps to void the non-compete if it doesn’t comply with the statute.  The amendment does not, however, include a deadline by which an employee must provide notice that the non-compete is void or address whether an employer can, when providing copy of the agreement to the employee, simultaneously invoke the contract, and thus nullify the employee’s ability to take an affirmative steps to void the agreement.

We will continue to monitor developments related to HB 2992.

 

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