Opinion ID: 787342
Heading Depth: 3
Heading Rank: 1

Heading: Meaning of bona fide advancement

Text: 17 The district court construed bona fide advancement as follows: 18 [A]n enhancement in job duties and responsibilities, a change in job title and a change in pay or benefits must converge to constitute the triggering date for a subsequent bona fide advancement within the meaning of ORS 653.295. An increase in pay standing alone will not suffice; a change in job responsibilities standing alone will not suffice; and a change in job title, standing alone, will not suffice — all of these elements must come together to constitute a bona fide advancement within the meaning of the Oregon statute. 19 Nike, 285 F.Supp.2d at 1246. McCarthy argues that the district court erred in interpreting bona fide advancement as requiring the convergence of all the listed elements. We agree with McCarthy to that extent, but believe the district court nonetheless reached the right result. 20 Although Oregon courts have interpreted section 653.295 before, they have not yet construed the meaning of bona fide advancement. In the absence of a controlling interpretation by the Oregon Supreme Court, we must construe the term as we believe the Oregon Supreme Court would. See Gravquick A/S v. Trimble Navigation Int'l Ltd., 323 F.3d 1219, 1222 (9th Cir.2003). When interpreting an Oregon statute, the court's task is to discern the intent of the legislature. Portland Gen. Elec. Co. v. Bureau of Labor & Indus., 317 Or. 606, 859 P.2d 1143, 1145 (1993). The first level of analysis is to examine[] both the text and context of the statute. Id. at 1146. [T]he text of the statutory provision itself is the starting point for interpretation and is the best evidence of the legislature's intent. Id. In trying to ascertain the meaning of the text, the Oregon Supreme Court adheres to certain rules of statutory construction, such as the rule that words of common usage typically should be given their plain, natural, and ordinary meaning. Id. The court also considers the context of the statutory provision at issue, which includes other provisions of the same statute and other related statutes. Id. If the legislature's intent is clear from the ... text and context, further inquiry is unnecessary. If, but only if, the intent of the legislature is not clear from the text and context inquiry, the court will then move to the second level, which is to consider the legislative history to inform the court's inquiry into legislative intent. Id. 4 21 The text and context of section 653.295(1)(b) do not clearly indicate what constitutes a bona fide advancement. The statute does not define the term, nor does it appear in other provisions of the same statute or other related statutes. Therefore, we look to the plain, natural and ordinary meaning of the words. Bona fide is defined as made or carried out in good faith; sincere. The American Heritage College Dictionary 158 (3d. ed.2000). An advancement is [a] forward step; an improvement, [a] promotion, as in rank. Id. at 19. 22 Obviously, these definitions leave room for debate about what constitutes a bona fide advancement. In resolving this ambiguity, we find some helpful indicators of legislative intent in the statute's legislative history. In 1977, the Oregon legislature enacted section 653.295, which at that time provided that noncompete agreements were void unless entered into only at the time of initial hiring. The purpose was to prevent an employer from imposing a new agreement on an old employee as an additional requirement of continuing in the same job. Hearing on S. 748 Before the S. Comm. on Bus. & Consumer Affairs, 1983 Leg., 62d Sess. (Or.1983) (summary of testimony of Donald Miller, President of Les Schwab Tire Co., and Milo Ormseth, attorney for Les Schwab) [hereinafter Miller/Ormseth testimony ]. 23 Apparently responding to concerns that foreclosing noncompete agreements later in an employee's career created undesirable results for employers and employees, the Oregon legislature amended section 653.295 in 1983 to permit non compete agreements to be entered upon the subsequent bona fide advancement of an employee within the company. 5 Testimony before the Oregon Senate Committee on Business and Consumer Affairs explained that, under the proposed bill, [t]he employer still could not surprise the old employee with a new requirement, but the employer could impose the noncompetion agreement as a condition of advancing to a higher position in which there is a real need and justification for a noncompete obligation. Miller/Ormseth testimony, supra. Similar testimony given before the Oregon House Committee on Labor stated, The employee will still be protected against new conditions for the same job, but the employer will be able to obtain protection upon advancing the employee to a higher position in which a noncompete obligation is reasonably required. Hearing on H. 2853 and S. 748 Before the H. Comm. on Labor, 1983 Leg., 62d Sess. (Or.1983) (summary of testimony by Donald Miller and Charles Hinkle)[hereinafter Miller/Hinkle testimony ]. This testimony also indicated that this Bill will improve the business climate in the State of Oregon. Employers will be free to locate sensitive employment positions here and still require reasonable noncompete agreements from advancing employees. Id. 24 In light of this history, it is apparent that the legislature intended to permit employers to require existing employees to agree to a noncompete agreement, so long as the employee's job content and responsibilities materially increased and the employee's status within the company likewise improved. Otherwise, the employer would merely be imposing a new condition for the same job. Id. Thus, an advancement would ordinarily include such elements as new, more responsible duties, different reporting relationships, a change in title and higher pay. 6 25 In McCarthy's case, his promotion included all of these elements. He received a new title of regional footwear sales manager and was presented to other employees as such. He undertook new duties associated with the new position, assumed a new supervisory role over other sales representatives and received a higher salary of $110,000. The issue remains, however, as to when his advancement occurred for purposes of triggering Nike's limited opportunity to obtain a binding noncompete agreement upon McCarthy's advancement. 26