Sued for working in Washington but still free Why

Have you ever worried about the enforceability of non-compete clauses in Oregon? You’re not alone. Understanding relevant laws is crucial for effective handling. This article explains how the Oregon Supreme Court case, Care Medical Equipment Inc. v. Step Saver, Inc., provides guidance for resolution.

Case Situation

Specific Circumstances

In Oregon, a company called Care Medical Equipment, Inc. had a problem with one of their former employees. This employee, who we’ll call the defendant, had left the company but started working in a similar job in nearby areas of Oregon and Washington. The issue was that when the defendant started working again, they did so in a way that the company believed broke a promise they made. This promise was part of a noncompete clause in their contract. Noncompete clauses are rules that say you can’t work in certain jobs or places after leaving a company. This specific clause said the defendant couldn’t work in a similar business for two years in certain counties. The company felt this was a problem and decided to take the defendant to court to make them stop and pay for any harm done.

Plaintiff’s Argument

Care Medical Equipment, Inc. argued that the defendant broke their promise by working in a similar job within the areas and time frame mentioned in the noncompete clause. The company said this caused harm to their business and wanted the court to enforce the agreement and make the defendant pay for damages.

Defendant’s Argument

The defendant, who used to be a sales representative for Care Medical Equipment, Inc., believed the noncompete clause was not fair or enforceable. They pointed to a specific Oregon law, ORS 653.295(1), which says such agreements must be made during a real job promotion or advancement. Since the defendant didn’t receive any such promotion, they argued the clause was invalid and they didn’t have to follow it.

Judgment Outcome

The court decided that the defendant was right. The noncompete clause was found to be void and unenforceable because it didn’t follow ORS 653.295(1). This meant the company’s claims were dismissed. Initially, the trial court awarded attorney fees to the defendant, but this was overturned by the Court of Appeals. The appellate court said the voided noncompete clause could not support a claim for attorney fees under the law, specifically ORS 20.096(1).

Resolution Method

Immediate Actions

When facing a noncompete dispute, the first thing you should do is review the employment contract and relevant state laws. In Oregon, ORS 653.295 is crucial. Check if the noncompete clause was made during your initial employment or a genuine promotion. If not, the clause might be void. Consulting with a legal expert to verify this is a wise step.

Filing and Submission of Claims

If you believe a noncompete clause is void, you may need to file a legal claim to have it declared unenforceable. This involves preparing legal documents that outline your arguments, referencing ORS 653.295 to support your case. Submitting these documents to the appropriate court is necessary to start the legal process.

Negotiation and Settlement Strategies

Instead of jumping straight into litigation, consider negotiating with your former employer. You might propose a settlement that acknowledges the clause’s unenforceability under the law. Mediation can also be an effective way to reach a resolution without incurring high legal costs. It’s important to approach these discussions with a clear understanding of your legal position and desired outcome.

FAQ

What is ORS 653.295?

ORS 653.295 is an Oregon law that sets rules about noncompetition agreements. It says these agreements are only valid if made when you first get hired or during a real job promotion. This protects employees from unfair restrictions on future jobs.

What is a noncompetition agreement?

A noncompetition agreement is a contract where you promise not to work in certain jobs or areas after leaving a company. It’s meant to prevent you from competing with your old employer for a set time and place.

What is an attorney fees clause?

An attorney fees clause in a contract says that if there’s a legal dispute, the winning party can get their legal costs paid by the losing party. It’s a way to cover the expenses of going to court.

What is ORS 20.096?

ORS 20.096 is an Oregon law about attorney fees in contract disputes. It allows the winning party to get their legal fees paid if the contract includes a clause allowing for it, no matter who the contract originally said would get fees.

How was the case resolved?

The Oregon Supreme Court agreed with the Court of Appeals, saying the noncompete clause was void and unenforceable. As a result, the defendant couldn’t get attorney fees because there wasn’t a valid contract to support them.

Why was the noncompete clause unenforceable?

The noncompete clause was unenforceable because it didn’t follow ORS 653.295. It wasn’t made during initial employment or a real promotion, so it couldn’t legally stop the defendant from working elsewhere.

Why were attorney fees not awarded?

Attorney fees were not awarded because the clause allowing them was part of the voided noncompete agreement. Without a valid agreement, there was no legal basis to award attorney fees.

What is contract severability?

Contract severability means you can separate valid parts of a contract from invalid ones. This helps keep the enforceable terms even if some parts are void.

Can contract clauses be split?

Yes, clauses can be split if they’re independent and intended to be separable. In this case, the attorney fees clause wasn’t separable from the void noncompete clause.

What is the impact on future cases?

This case highlights the importance of making sure noncompete agreements meet legal standards. It shows that if a contract clause is void, related provisions like attorney fees can also be affected.