Much has been written about Senate Bill 169 (S.B. 169), which established new limits on noncompetition agreements in Oregon as of 1 January 2022. Less attention has been paid to what employers can still do to protect their interests when an employee who had access to sensitive and proprietary information leaves the company for a new role with a competitor.
This article will explain the current best practices for using lawful noncompetition agreements before turning to two critically important tools: nonsolicitation agreements and confidentiality agreements, which are explicitly excluded from Oregon’s ever-broadening noncompetition statute.
A noncompetition agreement restricts employees’ ability to work for a company’s competitors after their employment ends. Oregon has had a statute governing noncompetition agreements since 1977, but Oregon lawmakers have continued to narrow the circumstances under which employers can enforce noncompetition agreements. S.B. 169, passed last year and effective on 1 January 2022, put further restrictions on noncompetition agreements, including limiting them to 12 months or less, limiting them to employees who earn US$100,533 or more per year (adjusted annually for inflation), and codifying the requirement that all noncompetition agreements be in writing.
The newest iteration of the law also makes noncompetition agreements that do not conform to the law void, as opposed to voidable. This is an important distinction,...
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