Oregon Non-Compete Agreement

Introduction

Key Things to Know

1. 1

   A non-compete agreement is a contract in which one party, usually an employee, agrees not to compete with a business for a set time and area after the relationship ends. In Oregon it is enforceable only within the strict limits of ORS 653.295.

2. 2

   Oregon voids a non-compete unless every statutory condition is met. Under ORS 653.295 an agreement entered into on or after January 1, 2022 is void and unenforceable unless it satisfies the salary floor, notice, exempt-employee, protectable-interest, 30-day-copy, and 12-month rules together.

3. 3

   There is a salary floor and it rises every year. The employee's annual gross salary and commissions must exceed a figure the statute sets at $100,533 and adjusts annually for inflation (CPI-U, West Region), so the current-year floor is higher, reported near $119,541 for 2026. Confirm the current figure and do not use another state's number.

4. 4

   The restriction cannot run longer than 12 months from the date of termination (ORS 653.295), a cap HB 2992 reduced from 18 months in 2022. The employer must also have a protectable interest, and courts in Oregon generally require the geographic scope and restricted activity to be no broader than necessary.

5. 5

   Notice and timing are strict. The employer must tell the employee in a written job offer, received at least two weeks before the first day of work, that a non-compete is required, or the agreement must follow a bona fide advancement, and the employer must give a signed written copy of the terms within 30 days after termination.

6. 6

   Only exempt salaried administrative, executive, or professional workers under ORS 653.020(3) can be bound. A lower-paid or below-threshold worker can be held to a non-compete only if the employer chooses the garden-leave option and pays, during the restriction, the greater of 50 percent of the worker's base salary and commissions or 50 percent of the adjusted floor.

7. 7

   Bonus restriction agreements and covenants not to solicit employees or customers sit outside ORS 653.295, so Oregon employers often protect confidential information with a nondisclosure agreement and the Oregon Uniform Trade Secrets Act (ORS 646.461 to 646.475) instead of, or alongside, a non-compete.

Oregon Requirements for Non-Compete Agreement

• Enforceable With Strict Limits

  In Oregon an employee non-compete is enforceable, but only within ORS 653.295. A non-compete entered into on or after January 1, 2022 is void and unenforceable unless it satisfies every statutory condition together: the notice rule, the exempt-employee rule, a protectable interest, the salary floor, the 30-day copy rule, and the 12-month cap. A covenant that misses any one of these cannot be enforced in Oregon.

• Inflation-Adjusted Salary Floor

  The employee's annual gross salary and commissions at termination must exceed a floor the statute sets at $100,533 and adjusts every year for inflation (CPI-U, West Region), so the current-year figure is higher, reported near $119,541 for 2026 (ORS 653.295). Confirm the current amount before relying on it, and do not substitute any other state's salary number.

• Maximum 12-Month Term

  A non-compete may not last more than 12 months from the date of termination (ORS 653.295), a cap HB 2992 reduced from 18 months for agreements entered into on or after January 1, 2022. A restriction written to run longer than 12 months exceeds what Oregon permits. Courts in Oregon generally also require the geographic scope and restricted activity to be reasonable and no broader than necessary.

• Two-Week Notice or Bona Fide Advancement

  The employer must inform the employee in a written employment offer received at least two weeks before the first day of work that a non-compete is required, or the agreement must follow a bona fide advancement (ORS 653.295). The employer must also provide a signed, written copy of the terms within 30 days after the employment ends. A covenant missing either step is unenforceable in Oregon.

• Only Exempt Salaried Workers

  Only an exempt salaried administrative, executive, or professional employee described in ORS 653.020(3) can be bound, and only when the employer has a protectable interest such as access to trade secrets or competitively sensitive confidential business, professional, or technical information. Hourly and non-exempt workers generally cannot be held to an Oregon non-compete.

• Below-Threshold Garden-Leave Option

  An employer can enforce a non-compete against an employee who earns below the salary floor only through a paid garden-leave option: the employer must agree in writing to pay, during the restricted period of up to 12 months, the greater of 50 percent of the employee's annual gross base salary and commissions at termination or 50 percent of the adjusted $100,533 amount (ORS 653.295). Without that paid commitment, the covenant is void.

• Void If Noncompliant; Use an NDA

  Because a non-compete is void unless every ORS 653.295 condition is met, Oregon employers commonly protect confidential information with a nondisclosure agreement backed by the Oregon Uniform Trade Secrets Act (ORS 646.461 to 646.475) and with a covenant not to solicit customers or coworkers. Bonus restriction and nonsolicitation agreements sit outside ORS 653.295 and are not subject to its salary floor or 12-month cap.

• Federal FTC Rule Is Not in Force

  The 2024 Federal Trade Commission non-compete rule was set aside by a federal court before it took effect, so it is not currently binding, and its status remains unsettled. Oregon does not depend on it: ORS 653.295 independently governs non-competes in Oregon, enforcing them only above the inflation-adjusted salary floor, for 12 months or less, and only when properly noticed and tied to a protectable interest.