This year has seen an increase in state legislation addressing noncompetition agreements (“non-competes”). Following Washington, D.C.’s passage of a ban on non-competes in January 2021 (addressed in greater detail here), Oregon, Nevada, and Illinois undertook revisions to their respective non-compete statutes. These legislative updates are summarized below.
Oregon
On May 21, 2021, Governor Kate Brown approved the proposed amendments to Oregon’s non-compete statute. The revised statute, which takes effect on January 1, 2022, provides that non-competes between an employer and employee are void and unenforceable unless:
- The employer informs the employee in a written employment offer at least two weeks before the employee begins work that they must sign a non-compete agreement as a condition of their employment, or the employee signs the non-compete as part of a bona fide advancement after their employment has begun;
- The employee is engaged in administrative, executive or professional work, performs predominantly intellectual, managerial, or creative tasks, exercises discretion and independent judgment, and is paid on a salary basis;
- The employer has a protectable interest (i.e., the employee has access to trade secrets or competitively sensitive confidential business or professional information, or is employed as on-air talent by an employer in the business of broadcasting);
- The employer provides the employee with a signed, written copy of the non-compete agreement within 30 days after termination of their employment; and
- The employee’s total gross salary and commissions at the time their employment ends exceeds $100,533 (adjusted annually for inflation).
The amended statute also decreases the enforceable non-compete period from 18 months to 12 months, and includes a limited exception to the salary and duties thresholds described above. An employer may enter into a non-compete agreement with an employee who is not engaged in administrative, executive or professional work and whose salary falls below $100,533 if the employer agrees in writing to provide the employee with compensation equal to at least 50% of their annual gross base salary and commissions, or 50% of $100,533 (adjusted annually for inflation), whichever is greater, during the non-compete period.
Nevada
Under Nevada law, non-competes are void and unenforceable unless they are supported by valuable consideration, do not impose any restraint that is greater than required for the employer’s protection, do not impose an undue hardship on the employee, and impose restrictions that are appropriate in relation to the valuable consideration supporting the agreement.
Non-competes also may not restrict, and an employer may not bring an action to restrict, a former employee from providing services to a former customer or client if the former employee did not solicit the former customer, the customer voluntarily chose to leave and seek services from the employee, and the employee is otherwise in compliance with the agreement’s geographic, temporal, and other restrictions.
Pursuant to the statute’s amendments, which take effect on October 1, 2021, employers may not enter into non-competes with employees who are paid solely on an hourly wage basis, exclusive of any tips or gratuities. In addition, if a court determines that a non-compete applies to an employee paid on an hourly wage basis, or the employer attempted to restrict the employee from working with a customer the employee did not solicit (as described in the preceding paragraph), the court will award the employee reasonable attorneys’ fees and costs.
Illinois
On May 31, 2021, the Illinois General Assembly passed a series of amendments to the Illinois Freedom to Work Act. The Act imposes limits on the scope and enforceability of non-compete agreements. Should Governor J.B. Pritzker sign the amendments into law, the following restrictions will take effect after January 1, 2022:
- Employers will not be permitted to enter into a non-compete with an employee unless the employee’s actual or expected annualized rate of earnings exceed $75,000 per year. This amount will increase to $80,000 on January 1, 2027, $85,000 on January 1, 2032, and $90,000 on January 1, 2037.
- Employers will also not be permitted to enter into non-solicitation agreements with an employee unless the employee’s actual or expected annualized rate of earnings exceeds $45,000 per year. This amount will increase to $47,500 on January 1, 2027, $50,000 on January 1, 2032, and $52,500 on January 1, 2037.
- Employers will not be permitted to enter into non-compete or non-solicitation agreements with an employee who has been terminated, furloughed, or laid off as a result of business circumstances or governmental orders related to the COVID-19 pandemic (or under similar circumstances to the COVID-19 pandemic), unless enforcement of the non-compete includes compensation equivalent to the employee's base salary at the time their employment was terminated for the period of enforcement (minus any compensation the employee earned through subsequent employment during the restricted period).
- A non-compete will be void and illegal with respect to individuals covered by a collective bargaining agreement under the Illinois Public Labor Relations Act or the Illinois Educational Labor Relations Act and certain individuals employed in construction.
- A non-compete or non-solicitation agreement will also be illegal and void unless (1) the employer advises the employee in writing to consult with an attorney before entering into the agreement and (2) the employer provides the employee with a copy of the agreement at least 14 calendar days before their employment commences or the employer provides the employee with at least 14 calendar days to review the agreement.
- If an employee prevails on a claim to enforce a non-compete or non-solicitation agreement in a civil action or arbitration filed by an employer (including, but not limited to a complaint or counterclaim), the employee will recover from the employer all costs and all reasonable attorney's fees regarding their claim to enforce the non-compete or non-solicitation agreement.
In light of these recent legislative changes, employers in Nevada, Oregon, and Illinois should consider whether they will require certain employees execute non-competes before the revised statutes take effect, implement new policies or restrictive covenants (such as confidentiality agreements) to protect their interests, and consult with counsel to ensure any future non-competes comply with their legal obligations.
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Bob’s practice focuses on representing and advising employers in complex labor relations and employment planning and disputes, including trade secrets/non-compete disputes and wage and hour issues. Bob has obtained numerous ...
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Eileen assists and counsels employers at all stages of the employment relationship, including advising clients on compliance with state and federal laws, conducting workplace investigations, and representing them in ...
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- Non-Competes
- Non-disclosure
- Non-Disclosure Agreements
- Non-discrimination
- Non-disparagement
- Non-Unit Employees
- Nonbinary Gender
- noncompete agreements
- Nondisclosure
- Notice 2010-84
- Notice 2012-9
- Notice 2013-74
- Notice 2014-19
- notice requirements
- NRLB
- NUHW
- Numerosity
- Numerosity Requirement
- Nursing Mothers
- NYC
- NYCHRL
- Oakwood Healthcare
- Obamacare
- Obergefell v. Hodges
- Obesity
- Occupational Safety and Health Administration
- ODEP
- OFCCP
- OFCCP Compliance; Affirmative Action; Agency Developments; Veteran Hiring
- OFCCP Developments
- OFCCP v. Florida Hospital of Orlando
- Off Duty Conduct
- Off-label Marketing
- Off-the-Clock Work
- Offer Of Judgment
- Offshoring
- OLMS
- omicron
- Ondray Harris
- Ondray T. Harris
- Online Accessibility
- Opinion Letters
- Opiod
- Opportunity to Compete Act
- Ordinary Disease of Life
- Oregon
- Organ Donor
- Organizing
- Organizing and the NLRB
- OSHA
- OSHA Developments
- Outbreak
- Outsourcing
- Overtime
- overtime exemption
- Overtime Exemptions
- Overtime Pay
- Overtime Regulations
- Overtime Rule
- Overtime Wages
- OWBPA
- Oxford Health Plans
- PAGA
- Paid Family Leave
- Paid Family Medical Leave
- Paid Interns
- Paid Leave
- Paid Sick Leave
- paid time off
- Paid Vaccine Leave
- Pandemic
- Pandemic Unemployment Assistance
- Parental Leave
- Patent
- Patient Protection and Affordable Care Act
- Patricia Shiu
- Pattern and Practice
- Paulsen v. Renaissance Equity Holdings
- Pay
- Pay and Promotions
- Pay Data
- pay disclosure
- Pay Discrimination
- Pay Equity
- Pay Reporting
- pay scale
- Pay Secrecy
- Pay Transparency
- Pay/Compensation
- Paycheck Deductions
- Paycheck Fairness Act
- Paycheck Protection Program
- Payroll Audit Independent Determination Program
- Payroll Debit Cards
- Payroll Taxes
- PBGC
- PCA
- PCC Structurals
- PCORI
- PDLL
- Penalties
- Penalty
- Pennsylvania
- Pennsylvania Minimum Wage Act
- Pension Plans
- Peoplemark
- PeopleSmart
- Perfectly Clear Doctrine
- Perfectly Clear Successor
- Performance and Accountability Report
- Period of Restoration
- Personal Jurisdiction
- Personal Jurisdiction; FLSA; Class Actions; Collective Action; General Jurisdiction; Specific Jurisdiction; Rule 23
- Personnel Policies
- Personnel Records
- Persuader Activity
- Persuader Agreements
- Persuader Rule
- Peter B. Robb
- Peter Schaumber
- Peter Sung Ohr
- Petition
- PEUC
- Phaladelphia Fair Practices Ordinance
- Philadelphia
- Pier 1 Imports
- Pitts v. Terrible Herbst
- Pizza Hut
- PLA
- plan sponsors
- Policies
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- Position Statement
- Post-Accident
- Poster Rule
- POWADA
- Poway Academy
- PPACA
- PPACA Checklist
- PPACA Timeline
- Practical Training
- Pre-Adverse Action Notice
- Pre-Adverse Action Requirements
- Precedent
- Predictable Scheduling
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- Pregnancy Disability Leave
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- Pregnancy Discrimination Act
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- Pregnant Workers Fairness Act
- Preliminary Injunction
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- Prescription Drugs
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- Prevailing Wage
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- Privacy
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- Procedure
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- prohibition
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- Proposed Rules
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- Protected Activities
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- provision
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- Purchase Agreements
- Purple Communications
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- Qualified Plans
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- Questioning
- Quickie Election
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- Race Discrimination
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- Range
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- Reasonable Accommodation
- Reasonable Accommodations
- Recess Appointments
- Recordkeeping
- recruiting
- Reduction-in-Force
- Register Guard
- Regular Rate
- Regular Rate of Pay
- Regulation
- Regulations
- Regulatory Compliance
- Rehabilitation Act
- Reilly Moore
- Reimbursement
- Reimbursements
- release
- Religion
- Religious Accommodation
- Religious accommodation; Title VII; SCOTUS; Supreme Court; Third Circuit
- Religious Accommodations
- Religious Beliefs
- Religious Discrimination
- Religious Freedom Restoration Act
- Religious Institutions
- remedies
- Remote Work
- remote workforce
- Reopen Workplace
- Reopening Business
- Reopening Workplace
- Repeal
- report
- Reporting
- Reporting of Group Health Plans
- Reporting Pay
- Representation Election
- Representation Elections
- Representation Fairness Restoration Act
- Reprisal
- Reproductive Loss Event
- Reproductive Loss Leave
- Reproductive Rights
- Rescind
- RESPECT Act
- rest breaks
- Restaurant
- Restaurant Industry
- Restaurants
- Restoring Balance and Fairness to the National Labor Relations Board
- restriction
- Restrictive Covenants
- Restrictive Covenants Act
- Retail
- Retail Litigation Center
- Retaliation
- Retirement Plans
- Retirement Savings
- Return to Work
- Revenue Procedure 2013-12
- Revenue Ruling 2014-9
- Ricci v. DeStefano
- Richard Griffin
- RICO
- RIF
- RIFs
- right of first refusal
- Right to Disconnect
- Right to Know
- Right to Work
- Right-To-Sue
- Rising Star
- Rite Aid and Lamons Gasket
- Robert Quackenboss
- Roland Juarez
- Roland Juarez; Los Angeles Business Journal
- Roland M. Juarez
- Rollovers
- Roth
- Rounding Policy
- Rounding Time
- Rule 23
- Rule 68 Offer
- Rule-Making
- Rulemaking
- Ryan A. Glasgow
- Ryan Bates
- Ryan Glasgow
- Sabbath
- Safety
- Safety Incentives
- Salary
- Salary Basis Test
- Salary History
- Salary History Bans
- Salary History Inquiries
- Salary Inquiry
- Salary Reduction
- Sales Commissions
- Same-Sex
- Same-sex couples
- San Francisco
- San Francisco Fair Chance Ordinance
- Sanjee Weliwitigoda
- Sara Harlow
- Sarbanes-Oxley
- SB 459
- SB 553
- SB 95
- SB-973
- SBA
- SBC
- SCA
- Scabby
- Scale
- Scheduling Letter
- Schneiderman
- School Closings
- Scope Of Coverage
- Scott Brown
- Scott H. Kimpel
- Scott Nelson
- SCOTUS
- Sealed Records
- SEC
- Second Circuit
- Secondary Boycotts
- Section 125
- Section 1557
- Section 1983
- Section 203
- Section 2802
- Section 302
- Section 7
- Section 7 Rights
- Secure Scheduling
- Security
- Security Screenings
- Seff v. Broward County
- SEIU
- Self-Insured Health Plans
- Senate Bill 1162
- Separation Agreements
- Settlement
- Settlement Agreement
- Settlement Agreements
- Settlement Disclosure
- Seventh Circuit
- severance
- Severance Agreements
- Severance Payments
- Severe Injury Report
- Sex Discrimination
- Sexual Harassment
- Sexual Orientation
- SFFA
- Shaena Rowland
- Shannon S. Broome
- Sharon Block
- Sharon Goodwyn
- Shelter in Place
- Short-Time Compensation Program
- Shutdowns
- Sick Leave
- Sick Pay
- Silica Standards
- Single employer
- SIR Dashboard
- Sixth Circuit
- Slow the Spread
- Social Distancing
- Social Media
- Social Media Evidence
- Social Media Policy
- Solicitation Policy
- Solicitation/Distribution Policy
- Southern California Pizza Co.
- Speak Out Act
- Specialty Healthcare
- Specific Jurisdiction
- Spirituality Programs
- Spokeo
- Spoliation
- Spousal Rights
- Standard of Review
- Standing
- Staples
- Starbucks
- state court
- state legislation
- Statistical Audits
- Statute of Limitations
- Statute of Repose
- Statutes of Limitations
- Staub v. Proctor Hospital
- Stay Violations
- Steering Claims
- STEM
- Stengart v. Loving Care Agency
- Stephen Pattison
- Stewart Acuff
- Stillborn
- Strategic Objectives
- Strategic Plan
- Stray Markings
- Stray Remarks
- Strike
- Strike Plans
- Strike Tactics
- Students for Fair Admissions
- SUB Payments
- Subcommittee on Health
- Subject-Matter Jurisdiction
- Subpoena
- Subpoena Duces Tecum
- Substantial Compliance
- Successor Bargaining Duty
- Successor Company
- Successor Employer
- Successor Employer Duty to Bargain
- Successor Liability
- Suitable Seating
- Summary of Benefits and Coverage
- Super Lawyers
- Supervisor
- Supplemental Paid Sick Leave
- Supply Chain
- Supreme Court
- Susan Wiltsie
- Suspension
- Suzan Kern
- Systemic Discrimination
- Systemic Enforcement
- Taxpayer Responsibility Accountability and Consistency Act
- TCPA
- Technatomy Corporation
- Telecommuting
- Telephone Consumer Protection Act
- Telework
- Temporary Employees
- Temporary Reinsurance Program
- Temporary Workers
- Tenth Circuit
- Terence Connor
- Terrence Flynn
- Tesla
- Test Factor
- Testing
- Texas
- Texas Constitution
- Texas Lawyer
- Texas Legal Awards
- Texas Mutual v. Ruttiger
- Texas Regulatory Consistency Act
- Texting
- The Board
- The Boeing Company
- The Opportunity to Work Ordinance
- Third Circuit
- Third-party Liability
- Thompson v. North American Stainless
- Thriving in Their 40s
- Time Rounding
- Timekeeping
- Tip
- Tip Credit
- Tip Pooling
- Tip Sharing
- Tipped Employees
- Tipped Workers
- Tipping Policies
- Tips
- Title III
- Title IX
- Title VII
- Title VII of the Civil Rights Act of 1964
- Tolling
- Top Insurance Cases
- TRAC
- Trade Secrets
- Trade Secrets & Non-Competes
- Trademark
- Traditional labor
- Trailblazer
- Training
- Training Programs
- Transgender
- Transgender Rights
- Transparency
- TransUnion
- Tratree
- Traxler v. Multnomah County
- Trial Management
- TRICARE
- Trucking Industry
- Trump Administration
- Trump Rule
- Tyler S. Laughinghouse
- Typicality Requirement
- U.S. Senate
- U.S. Senate Finance Committee
- UAW
- Uber
- Uber Drivers
- ULP
- ULP Charge
- UNC
- Unconscionability Doctrine
- Undocumented Workers
- undue hardship
- Unemployment
- Unemployment Benefits
- Unemployment Compensation
- Unemployment Discrimination
- Unemployment Insurance
- Unfair Labor Charge
- Unfair Labor Practice
- Unfair Labor Practices
- Uniform Glossary
- Unilateral Change
- Union
- Union Apparel
- Union Button
- Union Dues
- Union Election
- Union Elections
- Union Information Request
- Union Insignia
- Union Logo
- Union Organizing
- Union Organizing and the NLRB
- Union Rat
- Union Representation
- Union Representation Elections
- Union Sticker
- Unions
- United States v. Windsor
- University of North Carolina
- Unlawful Insistence
- Unlimited Vacation
- Unsuccessful Assisted Reproduction
- UPMC Braddock
- US Chamber of Commerce
- US Supreme Court
- USAction
- USCIS
- USDA
- Use or Lose Rule
- USERRA
- Vacation
- Vacation Pay
- Vacation Scheduling
- Vaccination
- Vaccine
- Vaccine Incentives
- Vaccines
- Valley Hospital Medical Center
- Variant
- VBA
- VCP
- Venue
- Veterans Preference Act
- VETS-100A
- VETS-4212
- VEVRAA
- Victoria Lipnic
- Video
- Viking River
- Virginia
- Virginia Business Magazine
- Virginia Center for Inclusive Communities
- Virginia Employment Legislation
- Virginia Human Rights Act
- Virginia Labor Law
- Virginia Law
- Virginia Lawyers Weekly
- Virginia Marijuana Laws
- Virginia Overtime Wage Act
- Virginia Wage Payment Act
- Virginial Lawyers Weekly
- Virus
- Visa Waiver
- Vital Industry
- Volks Rule
- Voluntary Incentive
- Voter List
- VW
- Wage & Hour
- Wage and Hour
- Wage and Hour Exclusion
- Wage Equality Act
- Wage Fixing
- Wage Inquiries
- Wage Investigation
- Wage Payment
- Wage Penalties
- Wage Reduction
- Wage Statement
- Wage Theft
- Wage Theft Prevention Act
- Wage Transparency
- Waiter
- Waiting Period Rules
- Waiver
- Waivers
- walk around
- Walling v. Portland Terminal
- Wang v. Chinese Daily News
- WARN
- WARN Act
- Washington DC
- We Can Help
- Weapons
- Web Accessibility
- Web Designer
- Webinar
- Website
- Website Accessibility
- Weight Restrictions
- Weingarten
- Wellness Programs
- Wesson
- West Virginia Workplace Freedom Act
- WHD
- Whistleblower
- Whistleblowers
- White Collar Exemption
- William Emanuel
- William J. Emanuel
- Wilma Liebman
- Windsor Decision
- Withdrawal of Recognition
- withholding requirements
- Witness Statements
- Women
- Women In Leadership
- Women of Influence
- Women’s Equality Act
- Work Schedule
- Work Transfers
- Work-Sharing
- Worker Misclassification
- Worker Protection
- Worker Safety
- Workers Bill of Rights
- Workers Compensation
- Workers' Compensation Insurance
- Workplace AI
- Workplace Diversity
- Workplace Investigations
- Workplace Monitoring
- Workplace Policies
- Workplace Privacy
- Workplace Rules
- Workplace Safety
- Workplace Technology
- Workplace Violence
- Workplace Violence Prevention
- WR Reserve
- Wrongful Discharge
- Year In Review
Authors
- Jessica N. Agostinho
- Walter J. Andrews
- Ian P. Band
- Ryan M. Bates
- Christy E. Bergstresser
- Theanna Bezney
- Jesse D. Borja
- Brian J. Bosworth
- Jason P. Brown
- M. Brett Burns
- Daniel J. Butler
- Christopher J. Cunio
- Jacqueline Del Villar
- Kimberlee W. DeWitt
- Steven J. DiBeneditto Jr.
- Robert T. Dumbacher
- Raychelle L. Eddings
- Elizabeth England
- Juan C. Enjamio
- Karen Jennings Evans
- Geoffrey B. Fehling
- Jason Feingertz
- Katherine Gallagher
- Ryan A. Glasgow
- Sharon S. Goodwyn
- Meredith Gregston
- Eileen Henderson
- Kirk A. Hornbeck
- J. Marshall Horton
- Roland M. Juarez
- Keenan Judge
- Suzan Kern
- Elizabeth King
- Stephen P. Kopstein
- Torsten M. Kracht
- James J. La Rocca
- Kurt G. Larkin
- Jordan Latham
- Tyler S. Laughinghouse
- Crawford C. LeBouef
- Michael S. Levine
- Michelle S. Lewis
- Brandon Marvisi
- Lorelie S. Masters
- Reilly C. Moore
- Michael J. Mueller
- J. Drei Munar
- Alyce Ogunsola
- Christopher M. Pardo
- Michael A. Pearlson
- Adriana A. Perez
- Kurt A. Powell
- Robert T. Quackenboss
- D. Andrew Quigley
- Michael Reed
- Jennifer A. Reith
- Amber M. Rogers
- Alexis Zavala Romero
- Zachary Roop
- Adam J. Rosser
- Katherine P. Sandberg
- Elizabeth L. Sherwood
- Cary D. Steklof
- C. Randolph Sullivan
- Veronica A. Torrejón
- Debra Urteaga
- Emily Burkhardt Vicente
- Kevin J. White
- Holly H. Williamson
- Susan F. Wiltsie