9/10/25 Oregon Legislature Bans Non-Compete Agreements for Many Medical Providers

September 10, 2025

By Andrew Schpak & Avery Tunstill

Senate Bill 951, as later amended by House Bill 3410, significantly restricts the ability of employers to use non-compete, non-disparagement, and non-disclosure agreements with medical provider employees. HB 3410 voids non-compete agreements—past, present, and future—for doctors and other licensed medical providers, with some exceptions.

Affected Medical Providers

HB 3410 applies to only certain medical provider employees, called “medical licensees.” These “medical licensees” include physicians, naturopathic doctors, nurse practitioners, and physician associates.

Exceptions

The bill has four exceptions to the ban on non-compete agreements for medical providers. 

First, the bill permits non-compete agreements between medical licensees and employers if the licensee owns a share of 1.5% or greater in the employer. Typically, this would be a medical provider who owns a share of the medical practice for which they work.

Second, the bill allows non-compete agreements for medical licensees who do not provide clinical care or other medical services. 

Finally, the bill creates two exceptions for employers who make a 'recruitment investment' amounting to 20% or more of an employee’s first-year salary:

• Employers who make such an investment and are located in areas experiencing a healthcare shortage can use a non-compete agreement for up to five years from the employee’s date of hire.

• Employers who make such an investment and employ a licensee who does not provide clinical care can use a non-compete for up to three years from the employee’s date of hire.

Non-Competes Must Still Comply with Other Applicable Law

In all instances, a non-compete agreement must comply with Oregon’s general non-compete law, ORS 653.295, which applies to all employers.

Limitations on Non-Disclosure and Disparagement Agreements

HB 3410 also creates limitations on non-disclosure and non-disparagement agreements that do not relate to proprietary information or trade secrets when the agreement is between medical licensees and an employer hospital, hospital-affiliated clinic, or management services organization. Non-trade secret related NDAs are only permitted when the employment relationship has ended or if the agreement is part of a negotiated settlement. 

An employer can face a retaliation suit if they take adverse action against a medical licensee for violating an NDA by reporting a potential legal violation to an authority. 

Questions about non-compete agreements? We are always happy to review the enforceability of existing agreements or help you draft or update agreements to ensure they comply with these new restrictions. Contact Andrew Schpak, at aschpak@barran.com, or 503-276-2156.