Utah Noncompete Reform: Only Today Left

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With less than a day left, we’re down to the wire on Utah’s consideration of noncompete reform this session.

Yesterday, March 9, the Utah Senate made some amendments (see below) to the version from March 8 and sent the amended version to the House. The House concurred with the amendments.

Prior to the amendments, the bill limited the maximum duration of an employee noncompete to one year and, for employers with 20 or more employees, imposed legal fees and damages on an employer who sought to enforce an unenforceable noncompete.

The amended bill maintains those same provisions, but adds several clarifications.

First, the new version of the bill makes clear that the law will apply only to employee noncompetition agreements entered on or after May 10, 2016. Second, the bill now makes clear that certain types of restrictive covenants agreements are not intended to covered; specifically, nonsolicitation agreements (though it is unclear whether this includes no-raid agreements, sometimes included within the term “nonsolicitation agreement”), nondisclosure (or confidentiality) agreements; noncompetes arising in the context of a (reasonable, good faith) severance agreement; and noncompetes arising in the context of a sale of business (where the individual receives value related to the sale (again, potentially a bit vague)) are all outside the scope of the bill.

The legislature adjourns today, March 10, at midnight. Stay tuned!

For more, see Senate approves watered-down bill on ‘noncompete’ clauses; Utah lawmakers pass controversial bill on noncompete contracts.