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Utah Amends Three-Year-Old Non-Compete Law For Second Time In Two Years

After enacting its non-compete law on April 7, 2016, Utah has twice amended the law to address additional restrictions on non-competes in the broadcasting industry. Governor Gary Herbert signed the second of those amended bills on March 22, 2019.

The Original Non-Compete Law

Utah’s original non-compete law, which we covered in an article dated April 7, 2016, imposed a one-year post-employment time limit on non-competes, except where the non-competes were part of a severance agreement or where they related to or arose out of the sale of a business.   The law also authorized employees to seek damages and attorney’s fees against employers who attempted to enforce invalid non-competes.

The 2018 Amendment

On March 27, 2018, the State amended its non-compete law to impose special restrictions with respect to employees in the broadcasting industry (see our related article, dated April 2, 2018). Specifically, the 2018 amendment provided that, for a non-compete agreement to be enforceable against an employee of a broadcasting company, the company had to establish the following elements:

  • The employee was paid a salary of at least $913 per week (i.e., $47,476 per year);
  • The covenant was part of a written employment contract of no more than four years; and
  • The employee was either terminated “for cause” or had breached the employment contract “in a manner that results in” his or her separation of employment.

In addition, the 2018 amendment prohibited non-competes from extending beyond the original term of the employee’s written contract.

The 2019 Amendment

On March 22, 2019, Governor Herbert signed into law House Bill 199, making a limited change to the provision on broadcasting employees. Specifically, the new law focuses on the year-old requirement that a non-compete in the broadcasting industry must be part of a written contract of no more than four years in duration in order to be valid. Eliminating the four-year written contract requirement, the law now provides that the non-compete must be “part of a written contract of reasonable duration, based on industry standards, the position, the broadcasting employee’s experience, geography, and the parties’ unique circumstances.”

There appears to have been limited media reporting regarding the newest amendment. However, legislators presumably believed the hard, four-year cap on written contract durations did not reflect the realities of the broadcasting industry. Consequently, the new law gives judges more leeway to evaluate the unique circumstances of individual parties, before determining whether a non-compete agreement is reasonable and enforceable.

Jackson Lewis P.C. © 2019

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About this Author

Conrad Shawn Kee, e-Discovery Attorney, Jackson Lewis Law Firm
Shareholder

Conrad Shawn Kee in the Denver and Stamford offices of Jackson Lewis P.C.  Mr. Kee is a member of the firm’s e-Discovery and Workplace Technology Practice Group, the co-chair of the firm’s Trade Secret Protection and Non-Competition Practice Group, the director of the Jackson Lewis E-Discovery U™ program, and a member of the firm’s International Employment Issues and Corporate Governance and Internal Investigations Practice Groups.  Shawn was selected by peers and in-house counsel to be listed in Chambers USA Guide to America’s Leading Business Lawyers for several years.

(203) 961-0404
Clifford R. Atlas, Employment Litigation Attorney, Jackson Lewis, non-solicitation agreements lawyer
Principal

Clifford Atlas is a Principal in the New York City, New York, office of Jackson Lewis P.C. He is the Co-Leader of the Non-Competes and Protection Against Unfair Competition Practice Group.

Mr. Atlas works extensively with clients in developing and drafting employment contracts and restrictive covenant agreements, and developing programs to best protect clients’ confidential business information. He has significant experience in prosecuting as well as defending actions involving breach of non-competition and non-solicitation agreements, employee raiding, misappropriation of confidential information, tortious interference with contract, unfair competition, and related business claims. Mr. Atlas also has assisted clients in employment issues arising from corporate transactions.

212-545-4017
Erik J. Winton, Jackson Lewis, Principal, Retaliation Lawyer, restrictive covenant drafting attorney
Principal

Erik J. Winton is a Principal in the Boston, Massachusetts, office of Jackson Lewis P.C. He is the Co-Leader of the firm's Non-Competes and Protection Against Unfair Competition practice group. His practice focuses on restrictive covenant drafting, counseling, litigation avoidance and litigation. He regularly provides valuable counsel to clients in New England and across the country regarding these issues.

Mr. Winton has extensive experience as a litigator, including successful first chair jury trial experience. He represents employers in...

617-367-0025
Colin Thakkar Non-Competes Unfair Competition attorney Jacksonville, FL  Jackson Lewis law firm
KM Attorney

Colin Thakkar is an Associate in the Jacksonville, Florida, office of Jackson Lewis P.C. Mr. Thakkar represents and counsels small and large businesses on all aspects of employment-related issues.

He has represented employers in federal and state disputes and litigation involving allegations of discrimination, wage and hour claims, ERISA claims, non-compete, non-solicitation, non-disclosure agreements and various employment-related common law claims. Mr. Thakkar also has significant experience representing and advising...

904-638-2655