Changes Coming to Oregon Noncompete Agreements

Changes Coming to Oregon Noncompete Agreements

On May 21, 2021, Oregon Governor Kate Brown signed Senate Bill 169, amending Oregon’s statute governing employee noncompete agreements, ORS 653.295. Effective January 1, 2022, employee noncompete agreements entered on or after that date will need to comply with four notable changes under the modified statute.

Unlawful Noncompetition Agreements are Void Instead of Voidable

Under the current version of ORS 653.295, a noncompete agreement that fails to satisfy the requirements of the statute is voidable rather than void—meaning that an employee bears the burden of taking some affirmative step to demonstrate their intent to void an unlawful noncompete agreement. Under the new iteration of the statute, noncompete agreements that fail to comply with all of the requirements of ORS 653.295 will be rendered “void and unenforceable,” regardless of what steps an employee does or does not take to void the unlawful agreement.

Revised Minimum Salary Requirements

Currently, for a noncompete agreement to be valid, employees must earn a salary that exceeds the median income for a four-person family, as determined by the U.S. Census Bureau. Moving forward under the amended statute, an employee’s annual gross salary must exceed $100,533 at the time of the employee’s termination, and this compensation amount will be adjusted annually for inflation.

Reduced Limit on Post-Employment Restriction Period

The current maximum period for post-employment restrictions in a noncompete agreement is 18 months, and any restricted period that exceeds 18 months is voidable rather than void. With the amendments to the statute, the period for post-employment restrictions is limited to 12 months, and any post-employment restriction period that exceeds 12 months is rendered void and unenforceable.

“Garden Leave” Option for Non-Qualifying Employees

Under the current statute, an employer can impose a noncompete agreement on an otherwise non-qualifying employee—that is, an employee that is not paid on an exempt, salary basis, or an employee who is not paid the statutory minimum compensation mentioned above—by use of the statute’s “garden leave” option. Using this option, an employer can unilaterally enforce a noncompete agreement on a non-qualifying employee by paying the employee during the restricted period: (1) a minimum of 50% of the employee’s gross annual salary at the time of the employee’s termination; or (2) 50% of the median income for a four-person family, as determined by the U.S. Census Bureau.

The option to enforce noncompete agreements against non-qualifying employees remains available to employers under the amended statute. To exercise this option an employer will need to confirm, in writing, payment to the employee that is the greater rate of either: (1) 50% of the employee’s gross annual salary at the time of the employee’s termination; or (2) 50% of $100,533, as adjusted for inflation.

Outside of the amendments, several existing limitations on noncompete agreements will remain unchanged under the new version of ORS 653.295. These continuing limitations include—among others—a requirement to notify employees in writing two weeks before the first day of employment that a noncompetition agreement is required as a condition of employment, and providing the employee with “a signed, written copy of the terms of the noncompetition agreement” within 30 days of termination of employment.

Finally, the limitations set out by ORS 653.295 do not apply to all types of restrictive employment agreements. Most notably, under the current and amended statute, the law only applies to employee noncompete agreements and does not apply to confidentiality agreements or agreements not to solicit an employer’s customers or employees.

Pasieczny Appointed to FINRA’s National Arbitration and Mediation Committee

SYK is pleased to announce that attorney Darlene Pasieczny (“Pah-shetch-nee”) has been appointed by the Board of Governors for the Financial Industry Regulatory Authority (FINRA) to serve a three-year term on the National Arbitration and Mediation Committee (NAMC).  Darlene will serve as one of the “Public” members of the national 13-person advisory committee.  The NAMC reviews and recommends rules, regulations, procedures and amendments relating to arbitration, mediation, and other dispute resolution matters to FINRA’s Board.

FINRA is a self-regulatory organization authorized by Congress to regulate broker-dealers and associated persons (such as stockbrokers), and it operates national dispute resolution program.  Claims by investors against their broker for securities-related misconduct causing recoverable investment losses are commonly filed in FINRA Arbitration.  FINRA also operates a growing FINRA Mediation program for informal resolution of securities disputes.

Darlene currently serves on the Board of Directors and is Treasurer for the Public Investors Advocate Bar Association (PIABA).  She is also the Chair of the Securities Regulation Section of the Oregon State Bar for 2021.

Congratulations Darlene!

Lake Oswego Chamber of Commerce

SYK is pleased to announce that Anastasia Yu Meisner has recently been selected as an Ambassador for the Lake Oswego Chamber of Commerce. The mission of the Chamber is to strengthen local business though education, advocacy and community partnerships. The Chamber provides a wide range of business support including weekly networking events to promote local businesses, business grants, PPP loan information, free PPE, Small Business Administration information, business and leadership development, and opportunities to spotlight area businesses.

For more information about the Lake Oswego Chamber of Commerce, click the following link https://lakeoswegochamber.com/

Police Training Needed to Raise Dementia Awareness

Police actions and training have been the focus for some time now, but our elders need to be included when there are conversations about reform.  Specifically, better training when it comes to identifying dementia and working with those that struggle with the insidious disease would necessarily lead to less frightful and concerning interactions.

In Colorado, a slight 73-year-old woman of 80 pounds was recently wrestled to the ground after leaving Walmart without paying for $13.88 in merchandise.  The police video footage shows that there were no efforts to talk with the demented woman to assess her awareness or understanding of the situation, before her arms were wrenched behind her and she had a male police officer on top of her, all while she was crying, “I’m trying to go home.”  Civil claims and criminal investigations are on-going.

It is heart-breaking, and a reminder to us all to slow down, and use patience and calmness when interacting with people with dementia.  In fact, let’s just try use that standard in ALL of our interactions with ALL of our fellow humans.

SYK Supports Oregon Harbor of Hope

Portland’s unhoused have been hit hard and a global pandemic certainly has not helped the situation.  Oregon Harbor of Hope is a non-profit dedicated to seeking solutions for this complex problem and SYK is proud to support their local efforts.

“The city, county and state are working hard to address our crisis, but they cannot solve this problem alone. The private sector must get involved to help turn this problem around. This is our city. This is our home. These are our homeless. We can make a huge impact and give people hope. They need our help.”

– HOMER WILLIAMS, FOUNDER OF OREGON HARBOR OF HOPE

A recent article discusses Mr. Williams’ efforts to help, including his most recent endeavor:

The most recent project for Oregon Harbor of Hope is a 50-unit pod village.  “His simple and elegant modular housing units are waterproof, lightweight, mobile, durable and secure. Equipped with heating and LED lighting, two beds, and a lock on the door. Designed to be part of a compact community – or dozens of such villages – with separate kitchens, showers, toilets, washing machines and garbage collection.”

There are no easy solutions, but there is much to be gained from continuing to search for solutions, including supporting good organizations like Oregon Harbor for Hope.

Between Two Screens: Bankruptcy Options

Please join us for the newest addition of SYK Studios – Between Two Screens. This latest episodes features attorneys Victoria Blachly and Jessica McConnell, focuses on bankruptcy options; what is bankruptcy and what does it mean for you?

Jessica McConnell is an experienced debtor-creditor attorney. She handles a variety of insolvency and bankruptcy matters; a majority of which have tax complexities. She regularly represents businesses, individuals, and estates with unfiled tax returns, compliance problems, and those with unpaid tax liabilities that are experiencing unwanted and unexpected tax collection. Ms. McConnell assists clients in resolving outstanding tax liabilities with penalty abatements, offers in compromise, installment agreements, collection holds, and discharging taxes in bankruptcy.

Senate Approves Additional Funds for Paycheck Protection Program

On Tuesday, April 21, 2020, the U.S. Senate passed H.R. 266, the “Paycheck Protection Program and Health Care Enhancement Act” by voice vote. The bill appropriates an additional $310 billion for the Paycheck Protection Program (PPP), which exhausted its initial $349 billion in funding within two weeks of Congress’ passage of the CARES Act. The bill also provided $60 billion for community banks and smaller lenders, $75 billion for hospitals, $25 billion for testing, and $60 billion for emergency disaster loans and grants.

The U.S. House of Representatives is expected to take up the bill on Thursday morning, April 23, 2020, as House lawmakers are expected to return to Washington for a recorded vote on that date. The President is expected to sign the bill shortly thereafter, thereby releasing the funds for additional lending to small businesses across the country.

The Paycheck Protection Program provides loans to small businesses under 500 employees. The loan obligation is eligible for complete forgiveness if loan proceeds are spent to support payroll costs, rent, and other qualified expenses. The amount of loan forgiveness is also not included in the taxable income of the borrower.

If a business has applied for the loan and did not receive funding due to the exhaustion of the program, they should contact their lender immediately to confirm their loan application is still active and any other pertinent details to get their Paycheck Protection Loan back on track.

Michael D. Walker is a business, tax and estate planning attorney who has worked with individuals and small to medium-sized businesses for nearly 30 years. A careful listener, Michael skillfully guides his clients to meet the wide variety of legal challenges they face in our current complex world.

Retirement Benefits: Attorney Anastasia Yu Meisner Featured in OSB Elder Law Newsletter

Samuels Yoelin Kantor LLP attorney Anastasia Yu Meisner was recently featured in the Oregon State Bar Elder Law Newsletter. Her piece, SSA Retirement Benefits for Spouses, Domestic Partners, and Divorced Spouses”, was included in the publication.

“When a worker qualifies to receive Social Security retirement benefits, derivative benefits based on the worker’s record may also be available to spouses, certain domestic partners, and ex-spouses. Social Security retirement benefits are available to workers who work at least 40 quarters, and earn a required amount for each quarter of coverage (QC). In 2019 the QC was $1,360. The QC automatically changes each year. In 1978 the QC was $250.

A spouse may receive up to half of the worker’s full retirement age benefit. With respect to this derivative benefit, it does not matter if the worker actually receives retirement benefits that are less than the worker’s full retirement-age amount. And the spouse’s receipt of half of the worker’s retirement benefit does not reduce the amount the worker receives. If a spouse can receive a higher amount from his or her own record, then the spouse will receive that benefit.”

To read the full article, please see the April addition of the Oregon Elder Law Newsletter.

Anastasia (Stacie) Yu Meisner is a member of the SYK Estate Planners practice. Her practice focuses on estate planning, mediation, probate, trust and estate administration. In addition, she also works with guardianships and conservatorships, as well as business transactions and formation. Meisner’s extensive experience in mediation has made her a sought after source of knowledge. She received both her undergraduate and law degree from Willamette University.

Tax Reform Now: Five Actions to Consider Before December 31, 2017

Tax and Business

Congress officially passed the Tax Cuts and Jobs Act on December 20th. Despite conflicting reports on when President Trump will sign the Act, he will sign it. Here are five last-minute actions you should consider for tax planning before the New Year to minimize your 2017 and 2018 tax liability.

One: Make Your Oregon Fourth Quarter Estimated Tax Payment by December 31st

Individuals who pay quarterly state income taxes should consider making their fourth quarter payment by December 31st. The Act limits the deduction for state and local taxes to $10,000 unless the taxes are paid and accrued in carrying on a trade or business.  In Oregon, the fourth quarter estimated payment is due on January 16, 2018. Paying by December 31st assures that these individuals can maximize their 2017 state and local tax deduction one last time. Strongly consider this action if you receive substantial investment income or are self-employed. The final version of the Act only allows a deduction for payments made for tax years on or before 2017, so do not make an estimated payment for 2018 taxes.

Two: Give More to Your Favorite Charities

Give and you shall receive . . . more in 2017 than 2018. For itemizing taxpayers, charitable contributions are one of the most well-known and utilized deductions. The Act’s decease to the marginal tax rates and the doubling of the standard deduction means a charitable deduction claimed on a 2017 tax return will yield more tax savings than the identical deduction on future tax returns. If you expect your marginal tax rate to decrease, or if you itemize now but might not under the new law, consider talking to your tax advisor about how some last minute giving could be the best gift you receive this holiday season. If you do not have a charity in mind, consider donating to Oregon’s Campaign for Equal Justice, whose mission is to make equal access to justice a reality for all Oregonians.

Three: Pay Your Local Property Taxes in Full for 2017-2018

Starting in 2018, individuals will not be able deduct more than $10,000 of their state and local income taxes and their local property taxes. While Oregon allows property taxes to be paid in installments, to be assured an individual can deduct the maximum amount of property taxes paid for the 2017-2018 year, consider writing a check for the installments due in 2018 to your county before the year end. Check with your tax advisor if you are subject to the AMT. The AMT limits the amount of the property tax deduction.

Four:  Pay and Claim Those Unreimbursed Employee Expenses and Other Miscellaneous Deductions Now – Including Your Tax Preparation Fees and Certain Legal Fees

As of 2018, miscellaneous itemized deductions will become a deduction of the past. This includes the deduction for tax preparation expenses, certain legal fees, and unreimbursed employment expenses. Unreimbursed employment expenses can include everything from tools & supplies, union dues, expenses for work related travel, subscriptions to business journals, attending seminars and more. If you expect to pay these expenses next year you should consider paying for them before December 31st. Of course, if you are self-employed or own a business, you will still be able to deduct some of these expenses against business income under the new law. In short: Consider paying your CPA for 2017 tax advice and your 2017 tax filing by December 31st.

Five: Delay That Taxable Gift

Taxpayers considering gifts that would result in the payment of gift taxes or GST may want to wait until 2018. The exemptions for both double in 2018 and a delay in the timing of the gift could reduce or eliminate any tax liability incurred. However, do not hesitate to make that 2017 annual exclusion gift!

Stay Tuned

This article is the first in a series planned to address the numerous changes to tax law imposed by the Tax Cuts and Jobs Act. We strongly recommend you consult with your tax attorneys and tax advisors on the impact of the act on your 2017 taxes and to plan for future years.

Caitlin M. Wong brings her passion for tax law and her commitment to empowering others to her practice at Samuels Yoelin Kantor LLP. Caitlin has experience with all aspects of both federal and state taxation, including tax planning for companies as well as individuals, audits, appeals, tax court litigation, estate planning and trust and estate litigation.

Win Olympic Gold – And Pay for It

Olympic Gold

Olympic gold metals are assessed for income tax, but the real cost could be the estate taxes.

Every time the Olympics come around, there’s dozens of articles and posts about how Olympic medals are subject to income tax. The IRS considers all prize winnings, such as gambling or game show prizes, to be income and thus taxable. Olympic medals get lumped into this group (as do the cash bonuses they come with). Luckily for the athletes, their medals are valued at the time they are earned, essentially the value of the materials. A gold medal from Rio is estimated to be worth $564, a silver medal is estimated at $305, and a bronze medal has little intrinsic value. Since Olympic medalists generally treat their sport as a profession the value of the medal and related bonuses are likely to be offset with a deduction for the significant expenses that most athletes incur.

What people may fail to consider is the effect the medals will have on the Olympian’s estate taxes. Property in an estate is valued at the date of death, not the original value. And though Olympic medals have little intrinsic value, their sentimental value makes them worth far more. In 2013, one of Jesse Owens’ medals from the 1936 Olympics in Berlin sold for $1.47 million, the highest price ever paid for a piece of Olympic memorabilia. A boxer from Ukraine, Wladimir Klitschko, sold his medal for $1 million. Even a medal from an athlete who isn’t as well known may be valued upwards of $30,000. These values are included in a deceased Olympian’s estate and are potentially taxable.

Michael Phelps broke a 2100 year old Olympic record by winning 13 individual gold medals over the course of four Olympics (not to mention his 28 medals total.) The medals are worth quite a lot on the open market, even if Phelps is only initially taxed on their intrinsic value. When he dies, his estate will likely need to hire a specialized appraiser to determine the value and even then, it will only be an educated guess. Of course, since Michael Phelps is superhuman, he may never die, which would make this whole process simpler.