On March 22, 2019, the State of Utah amended its non-compete statute for the third time in only three years.
“Strike One” came in 2016, when the State of Utah enacted Utah Code Annotated 34-51-201 et seq.to restrict the validity of post-employment restrict covenants to no more than one year from the date on which an employee is no longer employed by the employer. (But it only applied to covenants entered into on or after May 10, 2016).
Two years later in 2018, “Strike Two” placed conditions on when and where the amended statute applies, in response to lobbying by the broadcasting industry. For example, employers could not limit competition if the employee leaves the employer before contract expiration and an employer could only enforce a non-compete if the employment contract did not exceed four years. Additionally, an employer could only enforce a non-compete if the employer terminated the employee for cause or the employee breached the employment contract that results in his or her separation from the employer.
But, just a year later, the state of Utah took another swing and removed the four-year limit, and replaced it with new language permitting the application of a non-compete in any written contract of “reasonable duration, based on industry standards, the position, the broadcasting employee’s experience, geography, and the parties’ unique circumstances.”
With these changes, employers in Utah must keep in mind the shifting laws on the applicability and enforcement of non-competes. Time will tell if Utah hit it out of the park with these new requirements.