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Does noncompetition agreement actually protect businesses? Part 1

On Behalf of | Jan 10, 2011 | Uncategorized

The following is part 1 of 5 of our blog series for both employers and employees:

The Law of Noncompetition and Nonsolicitation Agreements in Oregon


Whether a start-up company or a going concern, when your business hires a new employee, or when you accept a new job with a new employer, you typically look forward to the start of a mutually beneficial business relationship.

However, seldom does either party look beyond the initial phase of the new position and consider what may happen at the end of the business relationship: What if I have to fire this employee?  What if I no longer want to work for this employer?  How can I protect my business?  How can I get another job?  What rights do I have?

Answers to these questions depend on the all of the circumstances and are often very fact specific.  In the constantly evolving eyes of the law, the answers aren’t always clear.  But knowing how to protect yourself-and knowing how the law may apply-is always important.

Businesses often require new employees, and sometimes even current employees, to sign noncompetition agreements.  This aims to protect the business from training and investing resources in an employee who later goes out and starts a competing business of their own, hurting the previous employer.

But in Oregon, and elsewhere, the law that governs these noncompetition agreements is complex, detail-oriented, and constantly evolving (see for example Nike, Inc. v. McCarthy).

Does your noncompetition agreement actually protect your business?  Will the agreement you just signed really prevent you from taking a different job later?  What kinds of agreements are enforced, and what are not?  And how are you ever supposed to know the difference?

In the coming days, we will take a look at these questions in our blog primer on the law of Noncompetition as well as Nonsolicitation Agreements in Oregon.  Check back soon or subscribe to this blog at the bottom of this page.

Jump to Part 2: The Landscape or Part 3: The Comparison