In January, the Oregon Bureau of Labor and Industries (BOLI) announced a new minimum salary threshold for noncompetition agreements. Effective immediately, for an Oregon noncompetition agreement to be enforceable, the total amount of the employee’s annual gross salary and commissions at the time of termination must exceed $116,427 (up from $113,241). In addition to meeting the minimum salary threshold, Oregon’s other statutory requirements for enforcing noncompetition agreements remain in effect:

• Employers must either (a) inform new employees in writing at least two weeks before the first day of the employee’s employment that a noncompetition agreement is required as a condition of employment, or (b) require a noncompetition agreement only after a subsequent bona fide advancement of an existing employee;

• The term of a noncompetition agreement may not exceed 12 months from the date of the employee’s termination;

• The employer must have a “protectable interest,” e.g., the employee subject to the noncompetition agreement must have access to trade secrets or competitively sensitive confidential business or professional information; and

• Employers must provide a signed, written copy of the terms of the noncompetition agreement within 30 days after the employee’s termination date.

Noncompetition agreements that do not meet these requirements are void, as opposed to voidable. In other words, an employee need not take steps to invalidate a noncompetition agreement that fails to comply with the requirements. These requirements also do not apply to bonus restriction agreements or non-solicitation agreements.

Employers are encouraged to confer with counsel regarding their use of restrictive covenants in Oregon and post-employment reminders.