What are Oregon's non-compete requirements?

Under ORS 653.295, Oregon non-competes must not exceed 18 months, the employee must earn above the median family income threshold, the employer must provide two weeks' advance written notice, and restrictions exceeding 12 months require garden leave pay of at least 50% of base salary.

Who is exempt from non-competes in Oregon?

Employees earning below the median family income for a four-person family (approximately $100,533) cannot be subject to enforceable non-competes under Oregon law. The agreement is void if the income threshold is not met.

How long can a non-compete last in Oregon?

Oregon law limits non-competes to 18 months. Restrictions between 12 and 18 months require the employer to pay at least 50% of the employee's annual base salary during the restricted period.

Non-Compete Agreements in Oregon: Statutory Requirements

Oregon's Non-Compete Statute

Oregon regulates non-competes under ORS 653.295, which has been amended multiple times, with significant changes in 2021. The statute imposes strict requirements that make many non-competes void.

Key Statutory Requirements

For non-competes entered into on or after January 1, 2022:

18-month maximum duration: Non-competes cannot exceed 18 months. Previously the limit was one year, but the 2021 amendments changed this.
Income threshold: The employee must earn above the median family income for a four-person family as determined by the Census Bureau (approximately $100,533 as of recent figures). Non-competes for employees below this threshold are void.
Garden leave required: The employer must provide a signed, written copy of the non-compete terms to the employee at least two weeks before the start of employment. Alternatively, the agreement must be entered into upon a subsequent bona fide advancement.
Written notice: The non-compete must be presented in a written employment offer received at least two weeks before the first day of employment.

Paid Compensation Option

Oregon's 2021 amendments also provided that non-competes exceeding 12 months (up to the 18-month max) require the employer to provide compensation during the restricted period equal to at least 50% of the employee's annual gross base salary at termination.

What Is Not Restricted

The statute does not affect:

Non-solicitation agreements (restrictions on soliciting clients or employees)
Non-disclosure agreements protecting trade secrets
Non-competes in business sale transactions
Bonus restriction agreements that require repayment of bonuses if the employee competes

Voidable Non-Competes

A non-compete is voidable if:

The employee earns below the income threshold
The employer did not provide two weeks' advance notice
The restriction exceeds 18 months
The employer did not provide compensation for restrictions exceeding 12 months

Red Flags

Employee income below the median family income threshold
Non-compete not provided at least two weeks before start date
Duration exceeding 18 months
No garden leave pay for restrictions between 12-18 months
Applied to employees who do not have access to trade secrets or competitively sensitive information

When to Consult a Lawyer

Consider consulting an Oregon employment attorney if your non-compete was presented after you started work, if you earn below the income threshold, or if the restriction exceeds the statutory limits. Oregon's strict compliance requirements mean technical defects can void the agreement.

This article is for informational purposes only and does not constitute legal advice. Consult a licensed attorney for guidance specific to your situation.