Noncompetition agreements
- bonus restriction agreements
- applicability of restrictions
Mentioned in
Oregon Noncompete Agreement
“Under Oregon law, continued employment is not adequate consideration for a non-compete agreement. Employees must be presented with some type of advancement to support sufficient consideration.”
Bibliographic info
How To Know if a Non-Compete Agreement Is Reasonable
“A Non-Compete Agreement restricts an employee from entering into competition with an employer after their employment period ends. Some Non-Compete Agreements can be unreasonable and limit your future job prospects.”
Bibliographic info
Source:
Section 653.295 — Noncompetition agreements; bonus restriction agreements; applicability of restrictions, https://www.oregonlegislature.gov/bills_laws/ors/ors653.html
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Notes of Decisions
“Initial employment”, for purposes of this section, means when the employe starts work. Olsten Corp. v. Sommers, 534 F Supp 395 (1982)
In action to enforce noncompetition covenant, where evidence showed defendants spent part of their time contacting existing customers of plaintiff and as result of these contacts customers were more likely to come to defendants initially and that when defendants formed their own business 14 of their 27 customers were former clients of plaintiff, defendant’s customer contracts gave plaintiff legitimate interest entitled to protection by noncompetition agreement. Olsten Corp. v. Sommers, 534 F Supp 395 (1982)
This section precluded enforcement of noncompetition agreement not entered into at time of employe’s initial employment. Pacific Veterinary Hospital v. White, 72 Or App 533, 696 P2d 570 (1985)
Agreement prohibiting employee from soliciting businesses targeted for marketing by employer is noncompetition agreement. Dymock v. Norwest Safety Protective Equipment for Oregon Industry, Inc., 334 Or 55, 45 P3d 114 (2002)
Employee refusing to sign unenforceable noncompetition agreement is not pursuing employment-related right. Dymock v. Norwest Safety Protective Equipment for Oregon Industry, Inc., 334 Or 55, 45 P3d 114 (2002)
“Bona fide advancement” means job content and responsibilities of employee materially increase and status of employee within company improves. Nike, Inc. v. McCarthy, 379 F3d 576 (9th Cir. 2004)
Where employee contracts to work for same employer for period subsequent to scheduled termination of employment, whether contract period is new “initial employment” depends on whether employment capacity during contract period substantially differs in nature from employment capacity prior to termination. McGee v. Coe Manufacturing Co., 203 Or App 10, 125 P3d 26 (2005)
As used in this section, “voidable” means that employee who wants to be relieved of what employee believes to be unenforceable noncompetition obligation must take affirmative steps to invalidate that obligation; otherwise, obligation remains valid. Bernard v. S.B., Inc., 270 Or App 710, 350 P3d 460 (2015), Sup Ct review denied
Plaintiff employee’s failure to take steps to void noncompetition agreement, where noncompetition agreement was executed in violation of two-week notice requirement, precludes plaintiff’s claim for intentional interference with economic relations. Bernard v. S.B., Inc., 270 Or App 710, 350 P3d 460 (2015), Sup Ct review denied
Term “customers of the employer” refers to persons with active or ongoing relationship with employer, and noncompetition agreement that is overly broad in applying to persons who are not current customers may be enforced with respect to persons who are current customers of employer if agreement contains severability clause. Oregon Psychiatric Partners v. Henry, 293 Or App 471, 429 P3d 399 (2018)
Once employee takes affirmative steps manifesting intent to treat noncompetition agreement as void, employer has burden of proving enforceability of agreement. Oregon Psychiatric Partners, LLP v. Henry, 316 Or App 726, 504 P3d 123 (2022)
Law Review Citations
58 OLR 336 (1979); 88 OLR 515 (2009)