Oregon Legislature, Nearing End of Session, Passes New Laws on Non-Competes, Hairstyles at Work, Equity at Public Schools, and Education Dress Codes

By Heather J. Van Meter - Bullard Law

June 21, 2021

The Oregon Legislature is nearing the end of this Legislative Session and is busy with state budgeting and finding time to pass new laws impacting employers, employees, and public education. These laws include further restricting employee non-competition agreements and a separate law protecting employee hairstyles at work that also allow school boards to adopt equity measures and limit public education dress codes. These laws are discussed below.

Non-Competition Agreements in Oregon

Senate Bill 169, signed by Governor Brown on May 21, further limits employee non-competition agreements in Oregon. Non-competition agreements can only be for twelve (12) months in duration instead of the previous eighteen (18) months’ duration allowed. ORS 653.295. The income requirements were also increased, requiring an income of at least $100,533, adjusted annually for inflation, to be enforceable. A non-competition agreement will generally be enforceable for no more than twelve months if the employee is paid for the non-competition agreement. Provided the payment is the greater of at least 50% of the employee’s gross base pay and commissions at the time of termination, or 50% of $100,533 (adjusted annually for inflation). In addition, the employee must be provided a written copy of the non-competition agreement within 30 days after termination.

Additionally, non-competition agreements that do not meet the statutory requirements are no longer merely “voidable”; they are now treated as “void and unenforceable” unless the agreements meet the strict statutory provisions. The statute’s revisions take effect January 1, 2022.

Covenants not to solicit an employer’s employees or customers are not impacted by SB 169.

Employers should review their existing non-competition agreements to determine if revisions are needed and contact Bullard Law with any questions.

Employee Hairstyles at Work Protected

The Oregon Legislature followed the lead of at least eight other states to pass the CROWN Act, which stands for “creating a respectful and open world for natural hair,” according to the national organization promoting the legislation nationwide. HB 2935 amends ORS chapter 659A, the chapter containing most of the state’s employment discrimination laws. The law defines “race” to include “physical characteristics that are historically associated with race, including but not limited to natural hair, hair texture, hair type and protective hairstyles.” ORS 659A.001(11). Notably, the definition of race does not refer to skin or hair or eye color, or any other shared physical or social qualities beyond hair type or texture. The law defines “protective hairstyle” to include “a hairstyle, hair color or manner of wearing hair that includes, but is not limited to, braids, regardless of whether the braids are created with extensions or styled with adornments, locs and twists.” ORS 659A.001(10). ORS 659A.030 is then amended to only allow dress codes or policies at places of employment if they (a) provide for reasonable accommodation of an individual’s health and safety needs on a case-by-case basis, and new provision (b) do not have a disproportionate adverse impact on members of a protected class to a greater extent than the impact on persons generally.

In practice, employers are permitted to have dress codes and policies as long as they allow for accommodation of individual health and safety needs AND do not disproportionately adversely impact a protected class such as race, gender, ethnicity, etc. This means, for example, an employer could have a general requirement of wearing hair nets around food preparation or in a technology manufacturer’s cleanroom but could not have a general prohibition on cornrows or braids with beads or dreadlocks for all employees.

For any questions on how this law impacts an employer’s dress code, contact Bullard Law.

Public School Board Equity Measures and Education Dress Codes

The same law that protects hairstyles at work, HB 2935, also adds new provisions allowing school district boards to implement “equity-focused” policies. These “equity-focused” policies are permitted to (a) prohibit discrimination as defined in ORS 659.850; (b) permit students to wear religious clothing at school consistent with any safety and health requirements; and (c) balance the health, safety, and reasonable accommodation needs of participants on an activity-by-activity basis. ORS 332.075. This provision allows the adoption of policies protecting religious-based headscarves and head coverings or full-body coverings at schools and school-based activities, provided health, and safety needs are met.

HB 2935 also amends ORS 659.850, which defines discrimination in education for public schools and higher education institutions, to exclude valid dress codes or policies from the definition of discrimination as long as the dress codes or policies: (a) provide for reasonable accommodation of an individual’s health and safety needs on a case-by-case basis; and the new provision (b) does not have a disproportionate adverse impact on members of a protected class to a greater extent than the impact on persons generally. The law also defines “race” to include “physical characteristics that are historically associated with race, including but not limited to natural hair, hair texture, hair type and protective hairstyles,” consistent with ORS 659A.001(11).

This provision prohibits restrictions on hairstyles historically associated with race unless the restriction disproportionately impacts a protected class. For example, a restriction prohibiting any loose long hair around equipment in a school woodshop class, metals class, or automotive class may be permitted for safety reasons, but general restrictions on cornrows or braids with beads or dreadlocks likely would not be permitted.