Time to review your Oregon termination agreements

Beginning on January 1, 2023, there will be new limits on what can be in an employment settlement agreement and new obligations when you’re negotiating such agreements.

Reviewing limits already in place

The Oregon Workplace Fairness Act (OWFA), which came into full effect on October 1, 2020, placed several limits on agreements between employers and employees. These included not only confidentiality and non-disparagement agreements, but also settlement agreements between employers and employees.

In general, the law prohibits agreements that prevent an employee from discussing discrimination or harassment (including sexual assault). The law also bans “no rehire” provisions in termination and settlement agreements. There are some limited exceptions to the prohibitions, primarily when the employee specifically seeks to add the otherwise prohibited language.

Changes to the OFWA

Senate Bill 1586—which was passed in February 2022 and becomes effective on January 1, 2023—makes some significant changes to the OWFA. The new law stops an employer from asking for a provision in a settlement agreement that prevents the disclosure of the amount or fact of a settlement unless the employee requests such language.