Oregon Non-Compete Agreement Overview
Oregon Restricts Non-Compete Agreements
Oregon places significant restrictions on non-compete agreements. Not all employees can be subject to non-competes. Review the state-specific requirements below to determine whether your agreement is enforceable.
Oregon restricts non-compete agreements under ORS 653.295. The state caps non-compete duration at 12 months (reduced from 18 months effective January 1, 2022). Oregon also imposes an income threshold: non-competes are only enforceable against employees who earn at or above the median household income for a four-person family (approximately $113,241 for 2024, adjusted annually based on Census Bureau data).
Oregon requires that the employer inform the employee of the non-compete requirement in a written offer of employment at least two weeks before the first day of employment, or if the non-compete is entered into after employment begins, it must be supported by a bona fide advancement. Employers must also be able to demonstrate a legitimate interest in protecting trade secrets, specialized training, or confidential information. Oregon's statute is one of the most prescriptive in the country, and failure to meet any requirement renders the non-compete void.
Restricted
Enforceability
12 months
Max duration
Yes
Blue-pencil
Must provide notice before hire; income threshold applies
Consideration
Oregon Enforceability Requirements
Understanding Oregon's specific rules is essential for drafting an enforceable non-compete agreement. The following provisions apply in Oregon.
Key Provisions
- Maximum 12-month duration (effective January 1, 2022)
- Income threshold: employee must earn at or above median family income (~$113,241 for 2024)
- Employer must provide 2 weeks written notice before employment begins
- Post-employment non-competes must be supported by bona fide advancement
- Must protect trade secrets, specialized training, or confidential information
- Blue-pencil doctrine applies
- Non-compliant agreements are VOID
How to Draft a Non-Compete in Oregon
Follow these steps to create an enforceable non-compete agreement that complies with Oregon law.
Verify State Requirements
Confirm that your non-compete complies with Oregon's enforceability standards, including any income thresholds, duration caps, and procedural requirements.
Define Restricted Activities Narrowly
Be specific about what activities are restricted. Broad prohibitions are more likely to be struck down or modified by Oregon courts.
Set Reasonable Geographic Scope
Limit the geographic restriction to areas where your company actually operates or where the employee had client responsibility in Oregon.
Provide Adequate Consideration
Ensure the employee receives adequate consideration for the non-compete restriction. In Oregon, must provide notice before hire; income threshold applies.
Include Severability and Signatures
Add a severability clause and get proper signatures from both parties. In Oregon, this helps protect the enforceable portions of the agreement if any provision is found overbroad.
Recent Legal Changes in Oregon
Oregon reduced the maximum duration from 18 months to 12 months effective January 1, 2022. The income threshold is adjusted annually. Employers must stay current on the threshold amount.
Employer Tips for Oregon
Verify the employee meets the income threshold before requiring a non-compete. Provide written notice at least 2 weeks before the start date. Keep duration at or under 12 months. Document the legitimate business interest being protected.
Employee Rights in Oregon
If you earn below the income threshold, your non-compete is void. If the employer failed to provide 2 weeks notice before your start date, the agreement may be void. The maximum restriction is 12 months. Consult an Oregon employment attorney to evaluate your agreement.
Sample Oregon Non-Compete Agreement
Below is a preview of our Oregon-specific non-compete agreement. Your customized document will include all provisions required for enforceability in Oregon.
NON-COMPETE AGREEMENT
STATE OF OREGON
Covenant Not to Compete
EMPLOYER:
Company Name: [Legal Entity Name]
Address: [Oregon Address]
Business Type: [Industry]
EMPLOYEE:
Name: [Full Legal Name]
Position: [Job Title]
Start Date: [Date]
NON-COMPETE TERMS
Restricted Activities: [Specific Activities]
Geographic Scope: [Area]
Duration: [Time Period] following termination
Consideration: [What Employee Receives]
Governing Law: State of Oregon
Oregon Non-Compete Agreement FAQ
Answers to common questions about non-compete agreements in Oregon, including enforceability, duration limits, and employee rights.
Official Oregon Resources
Use these official resources to verify Oregon non-compete enforceability rules and access state employment law information.
Related Oregon Documents
Depending on your situation, you may need additional documents alongside your Oregon non-compete agreement.
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