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Business litigation and changes in noncompete laws

On Behalf of | Apr 24, 2019 | Business Litigation

Many Oregon business owners employ the use of certain types of legal agreements to protect the interests of their businesses, including noncompete agreements. Frequently included as part of employment contracts, noncompete clauses are intended to protect the interests of the employer in the event that the employee leaves the company, lowering the risk of business litigation. This prevents a former employee from taking proprietary information to a competitor or disclosing information about the company.

There are some who believe that noncompete agreements unfairly impede the ability of employees to find new jobs, limiting their upward mobility. Estimates suggest that as many as 30 million employees are affected by these types of agreements. Many employees sign these agreements because they do not understand the potential long-term implications or are uncertain of whether they have the ability to negotiate with an employer. 

A newly proposed bill under consideration by the U.S. Senate could change the way noncompete agreements work. If enacted, employers could no longer require hourly workers to sign these agreements before starting a job. However, this would not change an employer’s ability to put legal protections in place to keep their trade secrets safe.

Oregon employers would be wise to learn about what this potential change could mean for their companies. It is always prudent to be proactive, learning about ways to avoid business litigation while still protecting the interests of the business. If an employer uses noncompete agreements, he or she may want to take time to review its employee contracts and ensure they are enforceable under current laws.