Noncompete

New Utah Post-Employment Restrictions Act

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Article courtesy of Prince Yeates Employment / Labor Attorney Mark Wagner.

March 15, 2016


On March 10th, in the waning of the 2016 General Session, the Utah state legislature passed HB 251, the Post-Employment Restrictions Act.  This Act prohibits “post-employment restrictive covenants,” entered into on or after May 10, 2016, that have periods longer than one year from end of an employee’s employment. The Act defines a “post-employment restrictive covenant” as:

an agreement, written or oral, between an employer and employee under which the employee agrees that the employee, either alone or as an employee of another person, will not compete with the employer in providing products, processes, or services that are similar to the employer’s products, processes, or services.

http://www.princeyeates.com/wp-content/uploads/2016/03/New-Utah-Post-Employment-Restrictions-Act-2016.pngExcluded from the definition are non-solicitation agreements, non-disclosure agreements, and confidentiality agreements.  The Act also makes exceptions for “reasonable” severance agreements agreed on in good faith at or after the time of termination, and non-compete agreements in exchange for value received in connection with the sale of a business.

The Act makes any prohibited post-employment restrictive covenant void.  Post-employment restrictive covenants of one year or less also must comply with other requirements for enforceability that have developed over the years by the courts.  Employers who unsuccessfully attempt to enforce such agreements are liable for the former employee’s court or arbitration costs, attorney fees, and actual damages.

Employers who use non-compete agreements for Utah employees should make sure that the time periods in any such agreements entered into after May 1st are no longer than one year.  They should also have such agreements reviewed for compliance with other requirements imposed under Utah common law.  Finally, they should consider carefully attempts to enforce such agreements.

The Act still must be signed by the Governor, but that appears likely.

Employers with employees in other states must comply with any requirements that exist under the laws of those states.

Update March 18th, 2016:

Utah Employers Must Grant Reasonable Accommodations for Pregnancy, Childbirth, Breastfeeding, and Related Conditions, and Provide Written Notice of Rights to Employees

In its recently completed 2016 General Session, the Utah Legislature enacted S.B. 59, Antidiscrimination and Workplace Accommodations Revisions.  This new Act, sponsored by Sen. Todd Weiler and Rep. Rebecca Edwards, modifies the Utah Antidiscrimination Act to require Utah employers to provide reasonable accommodations to employees “related to pregnancy, childbirth, breastfeeding, or related conditions” if such an accommodation is requested by an employee unless the employer can demonstrate that the accommodation poses an undue hardship.  An “undue hardship” is “an action that requires significant difficulty or expense when considered in relation to factors such as the size of the entity, the entity’s financial resources, and the nature and structure of the entity’s operation.”  A reasonable accommodation does not require an employer to permit an employee to have her child at the workplace.

An employer may require an employee to provide a certification from her health care provider concerning the medical advisability of a requested accommodation (except for more frequent restroom, food, or water breaks).  Such a certification must include the date the reasonable accommodation becomes medically advisable, the probable duration of the reasonable accommodation, and an explanatory statement as to the medical advisability of the reasonable accommodation.

The new Act also requires employers to give employees written notice about their rights under the Act, either by including such a notice in an employee handbook or by posting it in a conspicuous place in the employer’s place of business.  The new Act is on its way to the Governor, who is expected to sign it.

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About Mark Wagner

Mark A. Wagner concentrates his practice in employment law, homeowners association law, and health care law, and serves as Chair of the firm’s Employment and Labor Practice Group.
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