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Oregon Bans the Box, Strengthens Noncompete and Social Media Protections

    The ban-the-box movement continues to spread, this time into the Pacific Northwest.

    House Bill (H.B.) 3025, passed by the Oregon legislature, would regulate when Oregon employers can ask applicants to disclose criminal convictions. If the bill is signed by Gov. Kate Brown, as expected, it would go into effect on Jan. 1, 2016.

    Under the legislation, most Oregon businesses would be prohibited from requiring applicants to disclose criminal convictions on an employment application, or at any time prior to an initial interview. If there is no interview, an employer may not ask about criminal convictions until after extending a conditional offer of employment.

    The legislation does not prohibit employers from notifying applicants that they will later be required to disclose convictions or that a criminal background check will be performed as part of the hiring process. In fact, the legislation has no impact on an employer’s ability to consider criminal convictions as part of the hiring process, so long as the disclosure is not required prior to an initial interview, according to Sean Driscoll, an attorney in the Portland, Ore., office of Ogletree Deakins.

    The law would apply to businesses of every size, but it makes an exception for positions where federal, state or local law requires consideration of an applicant’s criminal history. It also exempts law enforcement agencies, employers in the criminal justice system and employers seeking “nonemployee volunteers.” In these situations, applicants may be required to disclose criminal convictions at any stage in the hiring process.

    If signed by the governor, violations of Oregon’s ban-the-box law would be handled exclusively by the Oregon Bureau of Labor and Industries. H.B. 3025 does not create a private right of action that would allow individuals to file lawsuits.

    What Should Employers Do Now?

    All businesses operating in Oregon should review their paper and electronic applications, Driscoll advised. If these documents ask about criminal convictions, most businesses should eliminate those questions. Employers in highly-regulated industries, such as banking, securities and health care, should determine whether they are legally obligated to consider an applicant’s criminal history. If so, then they may ask about criminal convictions at any stage, including as part of an application, Driscoll said.

    He also suggested that employers that plan to ask applicants about criminal convictions at the appropriate stage in the hiring process do so by using a form that includes the applicant’s signed acknowledgement that the disclosure is not being required prior to an initial interview. The form should also include an affirmation that the employee is being truthful in the disclosure, and a statement that misrepresentations about criminal convictions will result in a decision not to hire or subsequent termination, he added.

    Finally, employers should train staff who interact with applicants not to seek disclosure of criminal convictions prior to an initial interview, Driscoll said.

    Noncompete Enforcement Further Limited

    Brown has already signed H.B. 3236, which reduces the maximum enforceable duration of a noncompetition agreement to 18 months from the current 24 months. The new law will take effect Jan. 1, 2016, and will only apply to agreements reached on or after that date.

    Oregon currently regulates the use of noncompetition agreements by statute, generally limiting them to exempt employees earning more than the median income for a family of four (approximately $74,000 currently). Also, for an agreement to be enforceable, the employer must have informed the employee about it “in a written employment offer received by the employee at least two weeks before the first day of the employee’s employment.”

    This change in the law does not affect covenants not to solicit employees or not to solicit or accept business from former customers, Driscoll said. Oregon law will continue to treat noncompetition agreements differently than nonsolicitation agreements. Nonsolicitation agreements may be enforced regardless of an employee’s exempt status and compensation, and may be enforceable beyond 18 months when warranted. A nonsolicitation agreement, however, must be carefully drafted to avoid being categorized as a more strictly regulated noncompetition agreement, Driscoll cautioned.

    As a result of this new law, employers using noncompetition agreements in Oregon should 1) ensure the restrictive period does not exceed 18 months from the date of termination for any agreement entered in 2016, and 2) assess whether to use a covenant not to solicit instead, which will have a greater chance of being enforced, Driscoll advised.

    Provisions Added to Password Protection Laws

    Senate Bill 185, which has also been signed by the governor, adds two categories of prohibited conduct to Oregon’s password protection law that are not in any similar law to date. As of Jan. 1, 2016, employers will be prohibited from requiring that applicants and employees have a personal social media account as a condition of employment. They will also be banned from requiring that employees authorize the employer to advertise on their personal social media accounts. Employers can make these requests of their employees, but they cannot take any adverse action against, or retaliate against, applicants or employees who refuse these requests.

    The law's definition of social media extends the prohibition to virtually any form of online account, including not only social networking accounts but any account that permits sharing of user-generated content, including video- and photo-sharing sites, blogs and podcasts.

    “The Oregon legislature appears to be concerned that employers will seek new markets for their products or services by forcing applicants and employees to let the employer exploit their circles of social media contacts wholly unrelated to work,” said Philip Gordon, an attorney in Littler’s Denver office. “For now, Oregon employers must ensure that any campaign to use their own workforce to promote their products or services through social media is purely voluntary, and other employers should watch closely for similar developments in their states,” he advised.

    Joanne Deschenaux, J.D., is SHRM’s senior legal editor.