Non-Competes Harder to Employ, But Options Exist

Oregon non-competition law is about to change. Although there are many changes coming Jan. 1, two are especially significant: Non-compete agreements will only be valid if the covered employee is exempt from overtime, and employees must be informed of non-compete requirements at least two weeks before they start work. For employers that have historically relied on non-compete agreements, these requirements effectively preclude their use. These employers will be left wondering how to protect themselves from departing workers. However, even without non-competes, options are still available.

The Jan. 1 changes remove non-solicitation agreements from the definition of what constitutes a non-compete agreement. Non-solicitation agreements deal with employees not soliciting customers, suppliers or other employees upon their departure. The Oregon Trade Secrets Act precludes former employees from using or disclosing their employer's trade secrets. While much of the protection of a non-compete can be replicated on paper with a non-solicitation agreement and the Trade Secrets Act, enforcement is a challenge. For this reason, employers that can meet the new requirements should still use non-competes.

This article appeared in the November 15, 2007 issue of the Daily Journal of Commerce - Portland, OR.