Employee Non-Compete Agreement and Enforceability Memo — Oregon
OREGON Employee Non-Compete Agreement and Enforceability Memo
Quick-Reference Summary
| Item | Oregon Specifics |
|---|---|
| Governing statute | ORS 653.295 (Noncompetition agreements) |
| Effect of noncompliance (post-1/1/2022) | Void (not voidable) — no affirmative employee action required |
| Maximum duration | 12 months post-termination |
| Notice requirement | Written employment offer received at least two weeks before first day stating an NCA is required, OR agreement upon a subsequent bona fide advancement |
| Employee classification | Must be a person described in ORS 653.020(3); do not substitute a generic FLSA label |
| Salary threshold (2024) | $113,241 (annual gross salary + commissions at termination) |
| Salary threshold (2025) | $116,427 |
| Salary threshold (2026) | $119,541 |
| Threshold adjustment | Annually using CPI-U, West Region (All Items) immediately preceding the termination year |
| Protectable interest | Trade secrets; sensitive, confidential business or professional information; product development plans; launch plans; marketing strategy; sales plans |
| Post-termination delivery | Employer must provide signed copy to employee within 30 days after termination |
| Compensation alternative | Subsection (7) can replace only the § 653.295(1)(b) and (e) gates if the employer promises the greater stated 50% payment for the restricted period |
| Broadcast on-air talent | Separate protectable-interest and compensation route in § 653.295(2)(c) |
| Customer non-solicitation | Expressly excluded from subsections (1) and (3); exclusion is not an enforceability safe harbor |
| Employee non-solicitation | Expressly excluded from subsections (1) and (3); other law still controls |
| Confidentiality / NDA | A genuine confidentiality-only covenant does not fit the § 653.295 noncompetition definition; evaluate its actual operation, ORS 653.297, and other law |
| Bonus restriction agreements | Excluded from subsections (1) and (3), but must fit the detailed definition in § 653.295(8)(a) |
| Medical licensees | Run the separate ORS 653.297 gate before using any noncompete, NDA, or nondisparagement term |
| Trade secrets | Defined by ORS 646.461(4); protection depends on economic value from secrecy and reasonable secrecy efforts |
Part A — Enforceability Memo
TO: [CLIENT / HIRING MANAGER]
FROM: [COUNSEL NAME], [LAW FIRM]
RE: Enforceability of Proposed Non-Compete Agreement with [EMPLOYEE NAME] — Oregon Law (ORS 653.295)
DATE: [__/__/____]
1. Executive Summary
Oregon employment noncompetes are governed by ORS 653.295. The agreement is void and unenforceable unless the applicable written-offer or bona-fide-advancement, ORS 653.020(3) employee-status, protectable-interest, post-termination-copy, and termination-year compensation gates are satisfied. The term may not exceed 12 months. A medical licensee requires a separate ORS 653.297 analysis before this general form is considered.
Section 653.295(7) is not a universal cure. A compliant written compensation promise can replace only the subsection (1)(b) employee-status and (1)(e) compensation gates; the other statutory requirements remain.
2. ORS 653.295 Checklist — Each Box Must Be Checked
| Statutory Element | Status | Notes |
|---|---|---|
| Written employment offer received ≥2 weeks before first day states NCA is required, OR subsequent bona fide advancement | ☐ Yes ☐ No | Attach the offer and receipt evidence, or document the advancement facts for counsel review |
| Employee is a person described in ORS 653.020(3) | ☐ Yes ☐ No | Apply the Oregon statutory task, discretion, salary, and salary-basis language |
| Annual gross salary + commissions at termination > $[CURRENT YEAR THRESHOLD] | ☐ Yes ☐ No | Threshold: $113,241 (2024); $116,427 (2025); $119,541 (2026) |
| Employer has protectable interest | ☐ Yes ☐ No | Trade secrets, sensitive confidential info, product/launch plans, marketing/sales plans |
| Duration ≤ 12 months post-termination | ☐ Yes ☐ No | Any remainder over 12 months is void and unenforceable |
| Written agreement | ☐ Yes ☐ No | |
| Signed copy delivered to employee within 30 days after termination | ☐ Yes ☐ No | Calendar-driven; failure voids enforceability |
| Medical-licensee gate completed | ☐ N/A ☐ Yes ☐ No | If applicable, classify the parties and exception route under ORS 653.297 |
3. Bona Fide Advancement Record
ORS 653.295 uses the term "subsequent bona fide advancement" but does not define it in the statutory text. Record the former and new title, duties, authority, reporting line, compensation, and effective date, and have Oregon counsel evaluate whether the change qualifies. Do not treat a pay increase alone as a statutory safe harbor.
4. Subsection (7) Compensation Alternative
If the employee does not satisfy the ORS 653.020(3) status or termination-year compensation gate, subsection (7) permits a written promise to pay, during the restricted period, the greater of:
- 50% of the employee's annual gross base salary and commissions at termination, or
- 50% of the statutory minimum threshold (e.g., 50% × $116,427 = $58,213.50 in 2025).
The notice/advancement, protectable-interest, signed-copy, written-agreement, and 12-month requirements still apply.
5. Recommended Drafting Parameters (OR)
| Restriction | Recommended Range | Notes |
|---|---|---|
| Noncompete duration | [____] months, never more than 12 | Explain why the chosen period matches the documented interest |
| Geographic scope | [________________________________] | Tie scope to actual operations, role, and evidence; obtain counsel review |
| Restricted activities | [________________________________] | Tie only to products, processes, or services similar to the employer's and the employee's actual role |
| Customer covenant | [____] months / defined customers | Excluded from § 653.295(1) and (3), but not automatically valid; analyze other law |
| Employee covenant | [____] months / defined personnel | Excluded from § 653.295(1) and (3), but not automatically valid; analyze other law |
| Confidentiality | While information meets the contractual category and applicable law | Do not label public, generally known, employee-skill, or lawfully obtained information a trade secret |
| Bonus restriction | [________________________________] | Use only if every element of § 653.295(8)(a) is met; penalty is limited to unpaid profit sharing or bonus compensation |
6. Recommendation
[Based on the checklist above, the proposed NCA with [EMPLOYEE NAME] is / is not enforceable under ORS 653.295. Recommended modifications: ________________________________.]
Part B — Oregon Non-Compete Drafting Packet
EMPLOYEE NON-COMPETITION, NON-SOLICITATION, AND CONFIDENTIALITY AGREEMENT
This Agreement is entered into between [EMPLOYER NAME] ("Company") and [EMPLOYEE NAME] ("Employee") on [__/__/____] (the "Effective Date").
Recitals — ORS 653.295 Statutory Findings
A. Pre-Hire Offer or Advancement. ☐ Employee received a written employment offer on [__/__/____], at least two weeks before the first day on [__/__/____], stating that a noncompetition agreement is required as a condition of employment; OR ☐ This Agreement is entered into upon a subsequent claimed bona fide advancement from [PRIOR POSITION] to [NEW POSITION]. Attached facts concerning duties, authority, status, reporting line, compensation, and effective date are submitted for Oregon counsel's determination.
B. Oregon Employee-Status Gate. Based on the attached current duties-and-pay analysis, Employee is a person described in ORS 653.020(3): [FACTS AND ANALYSIS: ________________________________].
C. Compensation. Enforceability depends on annual gross salary and commissions, calculated on an annual basis, at termination exceeding the threshold for the termination year. The parties record current compensation but do not predetermine the termination-year result: $[________] for calendar year [____].
D. Protectable Interest. Company has a legitimate protectable interest in: ☐ trade secrets; ☐ sensitive, confidential business or professional information; ☐ product development plans; ☐ launch plans; ☐ marketing strategy; ☐ sales plans; ☐ other: [________________________________].
E. Medical-Licensee Gate. ☐ Employee is not a medical licensee governed by ORS 653.297. ☐ Employee may be covered; this form may not be used unless the attached ORS 653.297 analysis identifies a valid exception and all required facts.
1. Non-Competition
During the twelve (12) months immediately following the termination of Employee's employment for any reason (the "Restricted Period"), Employee shall not, directly or indirectly, within the Restricted Territory, engage in any business that competes with the Business in a capacity substantially similar to the capacity in which Employee served Company.
"Restricted Territory" means [________________________________].
2. Customer Non-Solicitation
During [____] months after termination, Employee shall not [SOLICIT / TRANSACT BUSINESS WITH] the following objectively defined customers concerning the following products or services: [________________________________]. ORS 653.295(5)(b) excludes this covenant from subsections (1) and (3); that exclusion is not an enforceability safe harbor. Oregon counsel must approve the customer set, conduct, duration, and other-law basis before use.
3. Employee Non-Solicitation (No-Raid)
For [____] months after termination, Employee shall not [DEFINED SOLICITATION CONDUCT] concerning [DEFINED EMPLOYEES / CONTRACTORS]. ORS 653.295(5)(b) excludes an employee nonsolicitation covenant from subsections (1) and (3), but does not declare it enforceable. Oregon counsel must approve its scope and other-law basis.
4. Confidentiality
Employee shall not improperly acquire, use, or disclose a trade secret as defined by ORS 646.461(4), or other specifically defined Confidential Information, except as authorized for Company work or required or protected by applicable law. Information ceases to receive trade-secret treatment under this clause when it no longer meets the statutory definition. Medical-licensee, protected-reporting, employee-rights, subpoena, and government-reporting carve-outs must be added where applicable.
5. Return of Property; Post-Termination Delivery
Upon termination, Employee shall return all Company property. Pursuant to ORS 653.295(1)(d), Company shall provide Employee a signed, written copy of the terms of this Agreement within 30 days after the date of termination.
6. Subsection (7) Compensation Promise
☐ Subsection (7) Compensation Promise. If at termination Employee does not satisfy ORS 653.295(1)(b) or (e), Company agrees in writing to provide Employee, during the period Employee is restricted from working, the greater of (a) at least 50% of Employee's annual gross base salary and commissions at termination or (b) 50% of the inflation-adjusted statutory amount for the termination year. The other § 653.295 requirements remain conditions to enforcement.
7. Reasonableness; No Reformation Beyond Statute
The parties acknowledge that any remainder of a noncompetition term beyond 12 months is void and may not be enforced. No clause in this Agreement directs a court to rewrite a restraint beyond what current Oregon law permits.
8. Remedies
Company may request only relief supported by the pleaded claim, evidence, contract, and current law. This Agreement does not stipulate irreparable harm, create a fee right, or predetermine entitlement to an injunction or damages.
9. Governing Law; Venue
This Agreement is governed by Oregon law. Any venue clause must be completed only after counsel confirms personal jurisdiction, subject-matter jurisdiction, federal-removal considerations, and current restrictions on employment choice-of-law and forum terms.
10. Severability; Survival; Entire Agreement
Severable. Sections 1–8 survive termination. This is the entire agreement on its subject matter.
11. Employee Acknowledgments
Employee acknowledges receipt of the Agreement and an opportunity to consult independent counsel. The parties' acknowledgments do not waive or conclusively establish any statutory gate; enforceability is determined from the actual offer/advancement, duties, pay at termination, protectable interest, copy delivery, duration, medical-licensee status, and current law.
EMPLOYEE:
| Signature | Date |
|---|---|
| [EMPLOYEE NAME] | [__/__/____] |
COMPANY:
| Signature | Date |
|---|---|
| [EMPLOYER NAME] | [__/__/____] |
| By: [________________________________] | |
| Title: [________________________________] |
Part C — Pre-Signing Checklist
☐ Written offer received at least two weeks before first day states the NCA requirement, OR subsequent bona fide advancement facts documented for counsel.
☐ Notice date documented in offer letter and HR file; calendar copy retained.
☐ ORS 653.020(3) classification verified using the Oregon statutory criteria.
☐ Termination-year compensation gate will be recalculated at termination using the then-current BOLI threshold ($119,541 for 2026).
☐ Duration capped at 12 months post-termination.
☐ Protectable interest specifically identified in Recital D.
☐ Restricted Territory and activities approved by Oregon counsel based on the actual role, operations, and protectable interest.
☐ Customer and employee covenants separately analyzed; § 653.295(5)(b) exclusion not treated as a safe harbor.
☐ Confidentiality uses the ORS 646.461(4) definition and all required reporting/rights carve-outs.
☐ Subsection (7) promise, if used, is written and does not replace the other statutory gates.
☐ Post-termination delivery calendar set: signed copy must reach employee within 30 days of termination.
☐ Onboarding file retains: signed offer, receipt evidence, NCA original, and ORS 653.020(3) analysis.
☐ Broadcast on-air talent route under § 653.295(2)(c) separately completed, if applicable.
☐ Medical licensee route under ORS 653.297 separately completed, if applicable.
☐ Bonus restriction agreement, if any, fits every element of § 653.295(8)(a); no 12-month safe harbor is assumed.
Sources and References
- ORS 653.295: https://www.oregonlegislature.gov/bills_laws/ors/ors653.html
- ORS 653.020 and 653.297: https://www.oregonlegislature.gov/bills_laws/ors/ors653.html
- Oregon BOLI — Noncompetition Agreements: https://www.oregon.gov/boli/employers/pages/noncompetition-agreements.aspx
- ORS 646.461: https://www.oregonlegislature.gov/bills_laws/ors/ors646.html
- Oregon Laws 2026 — ORS Sections Amended, Repealed, or Added To: https://www.oregonlegislature.gov/bills_laws/lawsstatutes/2026OrLawAR.pdf
About this template
- Last updated
- August 23, 2026
- Citations checked
- August 23, 2026
- Jurisdiction
- Oregon
- Category
- Employment & HR
Legal authority
- ORS 653.020(3) (state exempt-employee criteria incorporated by ORS 653.295)
- ORS 653.295 (employment noncompetition agreements and excluded covenants)
- ORS 653.297 (medical-licensee noncompetition, nondisclosure, and nondisparagement limits)
- ORS 646.461(4) (trade-secret definition)
Employment documents govern the relationship between a company and its workers, from offer letters and employment agreements through handbooks, performance reviews, and separations. Done right, they set clear expectations, protect against wrongful termination and discrimination claims, and give both sides a record to rely on. Done poorly, they invite lawsuits, agency complaints, and costly disputes.
Not legal advice
This template is provided for informational purposes. We recommend having an attorney review any legal document before signing, especially for high-value or complex matters.
Checked against the law it cites
A reviewer verified this template's legal citations against the official source on August 23, 2026.
ORS 653.020(3) (checked August 23, 2026): "An individual engaged in administrative, executive or professional work who: (a) Performs predominantly intellectual, managerial or creative tasks; (b) Exercises discretion and independent judgment; and (c) Earns a salary and is paid on a salary basis."
ORS 653.295 (checked August 23, 2026): "The term of a noncompetition agreement may not exceed 12 months from the date of the employee's termination. The remainder of a term of a noncompetition agreement in excess of 12 months is void and may not be enforced by a court of this state. Notwithstanding subsection (1)(b) and (e) of this section, a noncompetition agreement is enforceable for the full term of the agreement, for up to 12 months, if the employer agrees in writing to provide the employee, for the time the employee is restricted from working, the greater of: (a) Compensation equal to at least 50 percent of the employee's annual gross base salary and commissions at the time of the employee's termination; or (b) Fifty percent of $100,533, adjusted annually for inflation pursuant to the Consumer Price Index for All Urban Consumers, West Region (All Items), as published by the Bureau of Labor Statistics of the United States Department of Labor immediately preceding the calendar year of the employee's termination."
ORS 653.297 (checked August 23, 2026): "Notwithstanding ORS 653.295 (1) and (2), and except as provided in paragraph (b) of this subsection, a noncompetition agreement that restricts the practice of medicine or the practice of nursing is void and unenforceable between a medical licensee and: (A) A person, as defined in ORS 442.015; (B) A management services organization; or (C) A hospital, as defined in ORS 442.015, or a hospital-affiliated clinic, as defined in ORS 442.612."
ORS 646.461(4) (checked August 23, 2026): "“Trade secret” means information that: (a) Derives independent economic value, actual or potential, from not being generally known to the public or to other persons who can obtain economic value from its disclosure or use; and (b) Is the subject of efforts that are reasonable under the circumstances to maintain its secrecy."
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