74th OREGON LEGISLATIVE ASSEMBLY--2007 Regular Session
 
HA to A-Eng. SB 248
 
LC 267/SB 248-A8
 
                       HOUSE AMENDMENTS TO
                   A-ENGROSSED SENATE BILL 248
 
                    By COMMITTEE ON JUDICIARY
 
                             June 7
 
  On page 1 of the printed A-engrossed bill, delete lines 4
through 26 and delete pages 2 and 3 and insert:
  '  { +  SECTION 1. + } ORS 36.620 is amended to read:
  ' 36.620. (1) An agreement contained in a record to submit to
arbitration any existing or subsequent controversy arising
between the parties to the agreement is valid, enforceable and
irrevocable except upon a ground that exists at law or in equity
for the revocation of a contract.
  ' (2) Subject to ORS 36.625 (8), the court shall decide whether
an agreement to arbitrate exists or a controversy is subject to
an agreement to arbitrate.
  ' (3) An arbitrator shall decide whether a condition precedent
to arbitrability has been fulfilled.
  ' (4) If a party to a judicial proceeding challenges the
existence of, or claims that a controversy is not subject to, an
agreement to arbitrate, the arbitration proceeding may continue
pending final resolution of the issue by the court, unless the
court otherwise orders.
  '  { +  (5) A written arbitration agreement entered into
between an employer and employee and otherwise valid under
subsection (1) of this section is voidable and may not be
enforced by a court unless:
  ' (a) The employer informs the employee in a written employment
offer received by the employee at least two weeks before the
first day of the employee's employment that an arbitration
agreement is required as a condition of employment; or
  ' (b) The arbitration agreement is entered into upon a
subsequent bona fide advancement of the employee by the
employer. + }
  '  { +  SECTION 2. + } ORS 653.295 is amended to read:
  ' 653.295. (1) A noncompetition agreement entered into between
an employer and employee is   { - void - }   { + voidable + } and
may not be enforced by   { - any court in - }   { + a court
of + } this state unless   { - the agreement is entered into upon
the - } :
  '  { - (a) Initial employment of the employee with the
employer; or - }
  '  { - (b) Subsequent bona fide advancement of the employee
with the employer. - }
  '  { +  (a)(A) The employer informs the employee in a written
employment offer received by the employee at least two weeks
before the first day of the employee's employment that a
noncompetition agreement is required as a condition of
employment; or
  ' (B) The noncompetition agreement is entered into upon a
subsequent bona fide advancement of the employee by the employer;
  ' (b) The employee is a person described in ORS 653.020 (3);
  ' (c) The employer has a protectable interest. As used in this
paragraph, an employer has a protectable interest when the
employee:
  ' (A) Has access to trade secrets, as that term is defined in
ORS 646.461;
  ' (B) Has access to competitively sensitive confidential
business or professional information that otherwise would not
qualify as a trade secret, including product development plans,
product launch plans, marketing strategy or sales plans; or
  ' (C) Is employed as an on-air talent by an employer in the
business of broadcasting and, in the year preceding the
termination of the employee's employment, the employer expended
resources equal to or exceeding 10 percent of the employee's
annual salary to develop, improve, train or publicly promote the
employee. For the purposes of this subparagraph, the resources
expended by the employer to publicly promote the employee must
have been expended on media that the employer does not own or
control; and
  ' (d) The total amount of the employee's annual gross salary
and commissions, calculated on an annual basis, at the time of
the employee's termination exceeds the median family income for a
four-person family, as determined by the United States Census
Bureau for the most recent year available at the time of the
employee's termination. This paragraph does not apply to an
employee described in paragraph (c)(C) of this subsection.
  ' (2) The term of a noncompetition agreement may not exceed two
years. The remainder of a term of a noncompetition agreement in
excess of two years is voidable and may not be enforced by a
court of this state. + }
  '  { - (2) - }   { + (3) + }   { - Subsection (1) of this
section applies - }  { + Subsections (1) and (2) of this section
apply + } only to noncompetition agreements made in the context
of an employment relationship or contract and not otherwise.
  '  { - (3)(a) Subsection (1)(a) of this section applies only to
noncompetition agreements entered into after July 22, 1977. - }
  '  { - (b) Subsection (1)(b), subsections (4) and (5) and
subsection (6)(a) of this section apply to employment
relationships and bonus restriction agreements in effect or
entered into after October 15, 1983. - }
  ' (4)   { - Subsection (1) of this section does - }
 { + Subsections (1) and (2) of this section do + } not apply
to { + :
  ' (a) + } Bonus restriction agreements, which are lawful
agreements that may be enforced by the courts in this state { + ;
or
  ' (b) A covenant not to solicit employees of the employer or
solicit or transact business with customers of the employer + }.
  ' (5) Nothing in this section restricts the right of any person
to protect trade secrets or other proprietary information by
injunction or any other lawful means under other applicable laws.
  '  { +  (6) Notwithstanding subsection (1)(b) and (d) of this
section, a noncompetition agreement is enforceable for the full
term of the agreement, for up to two years, if the employer
provides 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 the median family income for a
four-person family, as determined by the United States Census
Bureau for the most recent year available at the time of the
employee's termination. + }
  '  { - (6) - }   { + (7) + } As used in this section:
  ' (a) 'Bonus restriction agreement' means an agreement, written
or oral, express or implied, between an employer and employee
under which:
  ' (A) Competition by the employee with the employer is limited
or restrained after termination of employment, but the restraint
is limited to a period of time, a geographic area and specified
activities, all of which are reasonable in relation to the
services described in subparagraph (B) of this paragraph;
  ' (B) The services performed by the employee pursuant to the
agreement include substantial involvement in management of the
employer's business, personal contact with customers, knowledge
of customer requirements related to the employer's business or
knowledge of trade secrets or other proprietary information of
the employer; and
  ' (C) The penalty imposed on the employee for competition
against the employer is limited to forfeiture of profit sharing
or other bonus compensation that has not yet been paid to the
employee.
  '  { +  (b) 'Broadcasting' means the activity of transmitting
of any one-way electronic signal by radio waves, microwaves,
wires, coaxial cables, wave guides or other conduits of
communications. + }
  '  { - (b) - }   { + (c) + } 'Employee' and 'employer' have the
meanings given those terms in ORS 652.310.
  '  { - (c) - }   { + (d) + } 'Noncompetition agreement' means
an agreement, written or oral, express or implied, between an
employer and employee under which the employee agrees that the
employee, either alone or as an employee of another person, will
not compete with the employer in providing products, processes or
services that are similar to the employer's products, processes
or services for a period of time or within a specified geographic
area after termination of employment.
  '  { +  SECTION 3. + }  { + The amendments to ORS 653.295 by
section 2 of this 2007 Act apply to noncompetition agreements
entered into on or after the effective date of this 2007 Act. + }
  '  { +  SECTION 4. + }  { + The amendments to ORS 36.620 by
section 1 of this 2007 Act apply to arbitration agreements
entered into on or after the effective date of this 2007 Act. + }
  '  { +  SECTION 5. + }  { + Any noncompetition agreement
entered into before the effective date of this 2007 Act shall
continue to be governed by ORS 653.295 as in effect immediately
before the effective date of this 2007 Act. + } ' .
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