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Utah Non-Compete Bill Falters in House


Last month, a non-compete bill sponsored by Representative Brian Greene (Republican from Pleasant Grove) & up for vote in the Utah House failed to make it through the Legislature.  The bill sought to ban enforcement of non-competes if they came after a worker was already employed, given no compensation (such as a bonus or promotion) for signing the non-compete, and laid off within six months.  However, by a 22 - 49 vote, the bill was resoundingly defeated after some business groups lobbied to kill the non-compete bill. 

One group in particular, The Free Enterprise Utah coalition, argued that the Utah State Legislature should hold off on any changes to non compete laws in the state until a survey about non competes was done among Utah businesses.  Representative Greene had countered this claim and argued that a survey was not needed to show that the current non compete laws in the states allowed many businesses, including some small high tech companies in the state, to persuade longtime employees to sign non competes and then these employees were subsequently fired.

Readers might recall that back in March of last year, non-compete legislation passed the State Legislature which limited the duration of non-competes to one year after the employment ends.  There were a few exceptions carved out, but the legislation was somewhat groundbreaking at the time, given how many pro-business groups sought to stymie that bill.  Had this particular bill passed, it would have further carved away some of the more restrictive portions of non-competes still allowed in the state.

Late last month, after the results of the survey were released, several Representatives (among them, Mike Schultz & Timothy Hawkes) announced that no further non-compete bill would be pursued at this time.  For those hoping for more movement on non-competes in Utah, they will either have to settle for the legislation passed last year or bide their time and wait until the next legislative session when another non-compete bill is likely to be introduced.  The fight appears to be over at this point. 


For additional information:  http://www.natlawreview.com/article/utah-non-compete-bill-fails-to-pass-house

Also see:  http://www.sltrib.com/home/4990734-155/lawmakers-drop-plans-for-bills-addressinghttp://www.sltrib.com/home/4990734-155/lawmakers-drop-plans-for-bills-addressing

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