Like the boy who cried wolf, my repeated cries that I would get to Missouri’s noncompete bills next seem to be false.
This time, I need to cover Oregon, as I will be speaking at a program discussing Oregon law later today.
Before turning to it, for those keeping count, there have been 65 noncompete bills in 25 states so far this year1 — excluding the two pending federal noncompete bills, D.C.’s new law to ban most noncompetes, and any proposed bills that may be circulating, but have not yet been filed. Five bills (one in each of five states2) have died — leaving the current tally at 60 noncompete bills still pending in 21 states. The 21 states are Arkansas, Connecticut, Georgia, Illinois, Iowa, Louisiana, Massachusetts, Minnesota, Missouri, Nevada, New Hampshire, New Jersey, New York, Ohio, Oregon, Pennsylvania, Rhode Island, South Carolina, Texas, Vermont, and West Virginia.
In this series, we are providing details on all pending bills (and any new ones that are filed) — and we will be simultaneously updating our Changing Trade Secrets | Noncompete Laws page. Note that the summaries are (sort-of) color coded for the nature of the bill (ban, modification or establishment of standards, reversal of prior changes) and the groups for whom it creates exceptions or specific limitations (medical, low-wage workers, others).
Up today: Oregon.
Oregon has three separate bills. They are as follows:
- SB.13 (“A BILL FOR AN ACT Relating to enforceability of noncompetition agreements; creating new provisions; and amending ORS 653.295”): Introduced on January 11, 2021, the bill would replace the existing noncompete law (in its entirety) with language the following (applicable only to agreements that post-date the act):
653.295. (1) A noncompetition agreement entered into between an employer and employee is void and unenforceable unless the noncompetition agreement is limited to:
(a) The protection of trade secrets;
(b) A covenant not to contact former customers or clients to provide similar products, processes or services after the employee has separated from employment by the employer; or
(c) The protection of proprietary information.
(2) The term of a noncompetition agreement may not exceed 18 months from the date of the employee’s termination. The remainder of a term of a noncompetition agreement in excess of 18 months is voidable and may not be enforced by a court of this state.
(3) Subsections (1) and (2) of this section apply only to noncompetition agreements made in the context of an employment relationship or contract and not otherwise.
(4) 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.
(5) As used in this section:
(a) “Employee” and “employer” have the meanings given those terms in ORS 652.310.
(b) “Noncompetition agreement” means an agreement, written or oral, express or implied, between an employer and employee under which the employee agrees that the employee, either alone or as an employee of another person, will not compete with the employer in providing products, processes or services that are similar to the employer’s products, processes or services for a period of time or within a specified geographic area after termination of employment.
(c) “Proprietary information” has the meaning given that term in ORS 164.377.
(d) “Trade secret” has the meaning given that term in ORS 646.461.
The bill is pending before the Senate Labor and Business Committee.
- HB.2325 (“A BILL FOR AN ACT Relating to noncompetition agreements; creating new provisions; and amending ORS 653.295”): Introduced on January 11, 2021, the bill would modify and reorganize parts of the existing law. Specifically, the bill would change noncompetes that do not comply with the act from being “voidable and may not be enforced” to “void and unenforceable,” decrease the maximum duration of the restriction from 18 months to 12 months, and replace the median-family-income-for-a-four-person-family threshold with a straight “$100,533, adjusted annually for inflation.”
The bill is pending before the House Business and Labor Committee.
- SB.169 (A BILL FOR AN ACT Relating to enforceability of noncompetition agreements; creating new provisions; and amending ORS 653.295): Introduced on January 11, 2021, the bill is the Senate analogue to HB.2325 above.
The bill is pending before the House Business and Labor Committee and has been voted favorably on (in March 2021) by the Senate Labor and Business Committee and (on May 5, 2021) by the House committee.
Next up: Missouri (I hope)
And, remember, if you want to see a summary of the current noncompete law in any state (and D.C.), please refer to our 50-state noncompete chart, which is updated on a continual basis, as the laws change.
*A huge thank you to Erika Hahn for all of her extraordinary help in tracking and monitoring all of the bills.
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[1] The 25 states are: Arkansas, Connecticut, Georgia, Illinois, Iowa, Kentucky, Louisiana, Massachusetts, Minnesota, Mississippi, Missouri, Nevada, New Hampshire, New Jersey, New York, Ohio, Oregon, Pennsylvania, Rhode Island, South Carolina, Texas, Utah, Vermont, Virginia, and West Virginia.
[2] The five states are: Kentucky, Mississippi, Nevada, Virginia, and Utah.