Non-Compete Amendments

10
34-51-101
34-51-102
34-51-201
34-51-202
34-51-301
0
Non-Compete Amendments
2026 GENERAL SESSION
STATE OF UTAH
Chief Sponsor: Tyler Clancy
Senate Sponsor: Heidi Balderree
LONG TITLE
General Description:
This bill amends provisions relating to non-compete agreements.
Highlighted Provisions:
This bill:
defines terms;
prohibits an employer from enforcing a non-compete agreement against an employee
under certain conditions;
prohibits a person from enforcing a non-compete agreement against an independent
contractor;
requires that an employer presenting an employee with an offer of employment include
with the offer of employment a non-compete agreement if the employer intends to enter
into a non-compete agreement with the employee;
imposes requirements on an employer presenting an employee with a non-compete
agreement;
requires that an employer give an employee advance notice of a non-compete agreement;
makes void a non-compete agreement under certain conditions;
provides that a person that fails to comply with provisions that this bill enacts may not
enforce a non-compete agreement;
grants a right of action to an individual against a person that attempts to enforce an
unlawful non-compete agreement; and
makes technical changes.
Money Appropriated in this Bill:
None
Other Special Clauses:
None
Utah Code Sections Affected:
AMENDS:
34-51-102
, as last amended by Laws of Utah 2018, Chapter 465
34-51-201
, as last amended by Laws of Utah 2019, Chapter 132
34-51-202
, as enacted by Laws of Utah 2016, Chapter 153
34-51-301
, as enacted by Laws of Utah 2016, Chapter 153
REPEALS:
34-51-101
, as enacted by Laws of Utah 2016, Chapter 153
Be it enacted by the Legislature of the state of Utah:
Section 1. Section
34-51-102
is amended to read:
34-51-102
. Definitions.
As used in this chapter:
(1)
"Broadcasting employee" means an employee of a broadcasting company.
(2)
"Broadcasting company" means a person engaged in the business of:
(a)
distributing or transmitting electronic or electromagnetic signals to the general public
using one or more of the following:
(i)
television;
(ii)
cable; or
(iii)
radio; or
(b)
preparing, developing, or creating one or more programs or messages for distribution
or transmission by means described in Subsection
(2)(a)
.
(3)
"Exempt broadcasting employee" means a broadcasting employee who is compensated
on a salary basis, as defined in 29 C.F.R. Sec. 541.602, at a rate equal to or greater than
the greater of:
(a)
$913 per week, or an equivalent amount if calculated for a period longer than one
week; or
(b)
the rate at which an employee qualifies as exempt under the Fair Labor Standards
Act, 29 U.S.C. Sec. 213(a) on a salary basis as defined in 29 C.F.R. Part 541.
(4)
"Nonexempt employee" means an employee who is nonexempt under the requirements
of the Fair Labor Standards Act of 1938, 29 U.S.C. 201 et seq.
(4)
(5)
(a)
"Post-employment restrictive covenant," also known as a "covenant not to
compete" or "noncompete agreement,"
"Non-compete agreement"
means an
agreement, written or oral, between an employer and employee under which the
employee agrees that
on or after the day on which the employer no longer employs
the employee,
the employee, either alone or as an employee of another person, will
not compete with the employer in providing
products, processes, or services
a
product, process, or service
that
are
is
similar to the employer's
products, processes,
or services
product, process, or service
.
(b)
"Post-employment restrictive covenant"
"Non-compete agreement"
does not include
:
(i)

a
nonsolicitation
agreements
agreement;
(ii)
or
a
nondisclosure
agreement;
(iii)
or
a
confidentiality
agreements
agreement; or
(iv)
a training repayment agreement
.
(5)
(6)
"Sale of a business" means a transfer of the ownership by sale, acquisition, merger,
or other method of the tangible or intangible assets of a business entity, or a division or
segment of the business entity.
Section 2. Section
34-51-201
is amended to read:
34-51-201
. Non-compete agreements.
(1)
Except as provided in Subsection
(2)
(7)
and in addition to any requirements imposed
under common law, for a
post-employment restrictive covenant
non-compete agreement

entered into on or after May 10, 2016, an employer and an employee may not enter into
a
post-employment restrictive covenant
non-compete agreement
for a period of more
than one year from the day on which the
employer no longer employs the
employee
.
is
no longer employed by the employer. A post-employment restrictive covenant that
violates this subsection is void.
(2)
An employer may not enforce a non-compete agreement entered into on or after May 6,
2026, against an employee if:
(a)
the employee is:
(i)
a nonexempt employee;
(ii)
a student who is enrolled in a full-time or part-time undergraduate or graduate
program while engaging in an internship or other short-term employment with an
employer; or
(iii)
eighteen years old or younger;
(b)
the employee's total earnings from the employer in the most recent calendar year are
less than $155,000; or
(c)
the employer terminates the employee as a result of a reduction in force.
(3)
A person may not enforce a non-compete agreement entered into on or after May 6,
2026, against an independent contractor.
(4)
(a)
Subject to Subsection
(5)
, when making an offer of employment, an employer
shall include with the offer of employment to the prospective employee any
non-compete agreement the employer intends to enter into with the prospective
employee.
(b)
When including the non-compete agreement with an offer of employment as
described in Subsection
(4)(a)
, an employer shall:
(i)
present the non-compete agreement in a way that a reasonable individual would
understand the non-compete agreement; and
(ii)
provide, in the offer of employment or contract, a statutory reference to this
section.
(5)
Before entering into a non-compete agreement with an employee, an employer shall
provide to the employee a written notice of the non-compete agreement at least 14
calendar days before the earlier of the day on which:
(a)
the employee begins working for the employer; or
(b)
the non-compete agreement becomes effective.
(6)
(a)
A non-compete agreement that violates Subsections
(1)
through (3) is void.
(b)
An employer that does not comply with the requirements of Subsections
(4)
and (5)
may not enforce the provisions of a non-compete agreement.
(2)
(7)
(a)
Subject to Subsection
(2)(b)
(7)(b)
, a
post-employment restrictive covenant
non-compete agreement
between a broadcasting company and a broadcasting
employee is valid only if:
(i)
the broadcasting employee is an exempt broadcasting employee;
(ii)
the
post-employment restrictive covenant
non-compete agreement
is part of a
written employment contract of reasonable duration, based on industry standards,
the position, the broadcasting employee's experience, geography, and the parties'
unique circumstances; and
(iii)
(A)
the broadcasting company terminates the broadcasting employee for
cause; or
(B)
the broadcasting employee breaches the employment contract in a manner that
results in the broadcasting employee no longer being employed by the
broadcasting company.
(b)
A
post-employment restrictive covenant
non-compete agreement
described in
Subsection
(2)(a)
(7)(a)
is enforceable for no longer than the earlier of:
(i)
one year after the day on which the broadcasting employee is no longer employed
by the broadcasting company; or
(ii)
the day on which the original term of the employment contract containing the
post-employment restrictive covenant
non-compete agreement
ends.
(c)
A
post-employment restrictive covenant
non-compete agreement
between a
broadcasting company and a broadcasting employee that does not comply with this
subsection
Subsection
(7)
is void.
Section 3. Section
34-51-202
is amended to read:
34-51-202
. Non-compete agreements -- Exceptions.
(1)
This chapter does not prohibit
or affect:
(a)
a reasonable severance agreement mutually and freely agreed upon in good faith at or
after the time of termination that includes a
post-employment restrictive covenant. A
severance agreement remains subject to any requirements imposed under common
law.
non-compete agreement; or
(2)
(b)
This chapter does not prohibit a post-employment restrictive covenant
a
non-compete agreement
related to or arising out of the sale of a business, if the
individual subject to the
restrictive covenant
non-compete agreement
receives value
related to the sale of the business.
(2)
Notwithstanding Subsection
(1)(a)
, a severance agreement remains subject to any
requirements imposed under common law.
Section 4. Section
34-51-301
is amended to read:
34-51-301
. Award of arbitration costs, attorney fees and court costs, and
damages.
(1)
If an employer seeks to enforce a
post-employment restrictive covenant
non-compete
agreement
through arbitration
or by filing a civil action
and
it is determined
the
arbitrator determines
that the
post-employment restrictive covenant is unenforceable,
the employer is liable for the employee's
non-compete agreement violates this chapter,
the arbitrator shall award the employee
:
(1)
(a)
costs associated with arbitration;
and
(2)
attorney fees and court costs; and
(3)
(b)
actual damages.
(2)
(a)
An employee or independent contractor has a right of action against a person that
seeks to enforce a non-compete agreement that violates this chapter if the employee
is a party to the non-compete agreement.
(b)
If an individual brings an action against a person in accordance with Subsection
(2)(a)
, and a court finds that the non-compete agreement violates this chapter, the
court shall award the individual:
(i)
actual damages;
(ii)
injunctive relief;
(iii)
costs associated with arbitration; and
(iv)
reasonable costs and attorney fees.
Section 5.
Repealer.
Title.
Section 6.
Effective Date.
This bill takes effect on
May 6, 2026
.
1-30-26 12:50 PM