Bernard v. S.B., Inc.

Under ORS 653.295(1)(a)(A), a noncompetition agreement that is not presented to an employee at least two weeks prior to the start of employment is voidable, and may be enforced by a court unless a party takes steps to void the agreement.

Plaintiff Bernard brought an action for, inter alia, intentional interference with economic relations against her former employer, S.B., Inc. (Employer). After accepting a job with Employer, Bernard was presented with a noncompetition agreement, which she signed. After three years of employment, Bernard left Employer’s company and went to work for one of its competitors in violation of the noncompetition agreement. Employer contacted Bernard’s new employer, and Bernard voluntarily left the new job but initiated the present action against Employer. Employer moved for summary judgment, arguing Bernard had failed to show the agreement was unenforceable. Bernard argued that, under ORS 653.295(1)(a)(A), the noncompetition agreement was unenforceable because Employer did not provide her with two weeks’ notice as required by the statute. The trial court granted summary judgment to Employer. On appeal, the Court determined the agreement was voidable, but that Bernard did nothing to void it and so it was valid at the time Employer contacted Bernard’s new employer. Plaintiff argued that because the noncompetition agreement was not presented to her two weeks before her employment commenced with Employer, it was “voidable and may not be enforced by a court of this state” under ORS 653.295(1)(a)(A), and therefore was invalid. The Court held that, when the legislature changed the word to “voidable” from “void,” they did not intend to hold that a noncompetition agreement executed without notice is absolutely unenforceable even where the parties have not voided the agreement. Because Bernard did nothing to void the agreement it was valid and enforceable when Employer invoked it. Affirmed.