Opinion ID: 787342
Heading Depth: 3
Heading Rank: 2

Heading: Meaning of upon ... the advancement

Text: 27 McCarthy's advancement consisted of multiple elements that played out over several weeks, with his promotion not being formalized until he received his Offer Letter with the accompanying noncompete agreement on March 27, 1997, and his pay increase not effective until April 1. In such circumstances, the question arises as to when a noncompete agreement must be entered into relative to this process of advancement. All the statute tells us is that the agreement must be entered into upon the ... bona fide advancement of the employee with the employer. Or.Rev.Stat. § 653.295(1). 28 McCarthy argues that a noncompete agreement must be entered into as soon as the employee takes on any of the duties of the new position. Such an inflexible rule, however, would put employers at risk of losing their noncompete option during a period of auditioning an employee for possible promotion and thus could hinder the advancement of employees from within a company, a concern that prompted the state legislature to amend the statute in 1983. 7 29 On the other hand, the statute and its legislative history make clear the process is not open-ended. The legislative history suggests that the employer and employee would likely come to some agreement or understanding on the terms and conditions of the new job, in the process of which the employer would inform the employee of the need for a noncompete agreement as a condition of the advancement. This would be consistent with affording employees the intended protection against surprise and imposition of new conditions. Miller/Ormseth testimony, supra; Miller/Hinkle testimony, supra. For similar reasons, the legislative history implies that an employer should not spring a noncompete agreement on an employee long after the commencement of the advancement process — for instance by unreasonably delaying a pay increase or title change, or deferring consummation of the employer's and employee's agreement on the terms and conditions of the new job. In short, although a noncompete agreement need not be entered into at the first instance that the employee assumes any elements of the new job, including new duties, neither does the window of opportunity to ask for a noncompete agreement remain open until the employer sees fit formally to finalize the advancement process. 30 Although the district court applied a bright line rule that would require all of the elements of the advancement to converge before an employer must obtain a noncompete agreement, we need not adopt its test in order to resolve the case before us. Under either a totality of the circumstances test or a bright line rule, McCarthy's noncompete agreement would be enforceable under section 653.295. McCarthy signed the noncompete agreement on March 27 in conjunction with reaching a final agreement on the terms and conditions of his new job, and his pay increase did not take effect until April 1. Moreover, McCarthy's advancement evolved over a reasonably short period of time, with no unreasonable delays by Nike in finalizing the process. For these reasons, we conclude that the district court did not err in finding that McCarthy's noncompete agreement was entered into upon his bona fide advancement.