From: uttechexec@yahoo.com
To: Steve Urquhart, Scott Sandall, David Lifferth, Jack Draxler, Edward Redd, Curt Webb, Jacob Anderegg, Justin Fawson, Gage Froerer, Jeremy Peterson, Dixon Pitcher, Brad Dee, Paul Ray,
Subject: What's Good for the Goose (UT employers) is Not Good for the Gander (UT employees) - Support Original HB 251, not Amended House Version
Date: Sun Feb 28 06:40:20 MST 2016
Body:
Dear Utah State Speaker, Senator, and Representative,

cc Local Utah News (KUTV, KSL, ABC, Fox)

Please consider the following carefully - a better Utah and future for our citizens and our children is at stake.  This is a situation of what has historically been good for the goose (UT employers) is not what's good for the gander (UT employees). 

As a Utah citizen and a technology executive with a large employer in the state of Utah, I'm encouraged by the creation of the original House Bill 251 by Mike Schultz "Post Employment Restrictions Amendment" (non compete) and encourage you to support and vote for an amended version of it

There is one problem - the original House Bill as it was introduced by Mike Shultz benefited Utahans but was unfortunately amended due to unnecessary pressure by the Utah Technology Council and its lobbyists thus diluting the positive effects that were originally introduced   - it has already passed the House with a unanimous vote.  The primary dilution
was the addition of a two-year post employment clause.  Most employment agreements already contain a two-year post employment clause thus rendering the amended bill as if nothing had been introduced in the first place.   I'm encouraging you all to reinstate the original bill via amendment and or through senate committee and send it back to the House and to support it. 

For fear of reprisal from my employer and the Utah Technology Council and its member organizations, I'm attempting to remain anonymous in supporting the original HB 251.  Most, if not all employees of technology firms in the state of Utah feel identical to the way I do regarding supporting this bill.  You would be representing the broader base of citizens in your districts by supporting the original version of House Bill 251 as well as promoting a more innovative, competitive marketplace with more employment options for Utah citizens.

The current post employment restrictions laws are stifling innovation, economic development, and job creation and ultimately leaving Utahans with less options than their neighbors in states like California with healthy technology sectors where this is a non-issue. 

If you would like more detail and are not planning to vote in favor of the original HB 251, please consider reading the following sections below:

  • My Own Story and Why I and the Vast Majority of Utahans Support the Original HB 251
  • Why are Lobbyists, the Utah Technology Council, Business Owners and Equity Holders Opposing this?
  • Why Are the Current Post Employment Restrictions Unnecessary and Go To Far?
Respectfully,


Anonymous Utah Technology Executive
Husband and Father of Four
Future Business Owner and Job Creator
Citizen of Utah


ADDITIONAL INFORMATION & CONTEXT TO SUPPORT ORIGINAL HB 251

My Own Story and Why I and the Vast Majority of Utahans Support the Original HB 251.

I grew up here in Utah, went to a public state university, but had to leave the state to gain technology experience after graduating from school due to a lack of options.  Now, having been back in Utah for a decade, as an executive of one of the largest technology companies here in UT (think Thanksgiving Point in the heart of Silicon Slopes) I have often been exposed to numerous opportunities to work for many other technology firms as well as create my own software company here in Utah.  The biggest issue that has prevented me from leaving to work for another company or start my own company which would result in the creation of hundreds if not thousands of jobs are the current employment laws overly protecting employers located in Utah.  The non-compete and post employment  terms are drafted so broadly that almost any other technology company could be considered competitive and thus thwarting a better employment option or new venture creation for a period of two to four years post employment. 

Several years ago, a fast-growing, out of state technology company approached me to work for them and was considering opening up new offices in UT.  They asked if I would oversee an entire department and hire many staff in UT due to the wonderful higher educational infrastructure and talented workforce which would have resulted in the creation of many jobs in Utah.  After careful review of my employment agreement with my current employer, they were still willing to offer me the position, but stated that I would have to leave Utah (again) and hire staff out of the state to circumvent my extremely restrictive post employment obligations for a period of two years.  The business did not even compete directly with my current employer, but the attorneys were concerned that the language in the agreement was so broad that it could lead to legal action in an attempt to keep me and prevent this new employment option.

My current employment agreement through broad competitive definitions has largely prohibited me for the period of two years from options of creating my software company or leaving to work for another.  The legal team that reviewed my employment agreement and gave me the bad news were legal experts from one of California's Silicon Valley's largest private equity and venture capital firms.  This legal team stated that they knew that UT was already not favorable to its employees in post employment restrictive matters, but rather favored employers and their opinion was that they did so unnecessarily.  After having reviewed my agreement, the legal team stated it was one of the most egregiously employer favored contracts they had ever seen and left me with little to no option as an employee other than to leave the state of Utah. 

Over the last five years, I have had larger aspirations and specific desires to innovate and create my own software company here in Utah which would create many jobs, establish a tax base as a new company, and benefit both the state and its citizens.  Several Utah as well as Slicon Valley venture capitalists have approached me and have offered to fund any initiative that I would create but have been largely thwarted by the restrictive post employment laws which favor my current employer.  I have met with top legal counsel here in UT regarding Utah's post employment restrictions and its over-favorability to employers and have outlined a very expensive, arduous process by which I could create a new software company.  My situation only represents one use case, there are probably hundreds if not thousands of employees who are faced with similar obstacles resulting from these unnecessary employer protections. 

Why are Lobbyists, the Utah Technology Council, Business Owners and Equity Holders Opposing this?

As I think ahead to the day of having my own technology company - of course I would want these same restrictive post employment laws benefiting me.  Why would I want restrictive post employment agreements and laws supporting them?

  1. Prevents Top Employees from Leaving and Starting Their Own Companies
  2. Prevents Top Employees from Joining Competitive Offerings
  3. Prevents Competition
  4. Overall, this protects the interests of the business owners and their specific investors. 
The above reasons sound tantamount to anti trust and anti-American, but unfortunately they are not currently anti-Utahan.  As a future software entrepreneur, I would not myopically support the current laws and would support the original version of House Bill 251.  Why - in the short term keeping the talent in my business and out of the hands of the competition would benefit me, but in the long term, I understand that competition is the catalyst for innovation which secures an overall stronger economy and better workforce which also attracts talent to the state.  This forces employers to treat their employees better and align both the business interests as well as the employees.  If the employees feel trapped due to poor leadership, management, or policies, why not promote reformed laws that allow them to leave which in turn forces better corporate leadership and corporate polices for that benefit Utahans. 
Lobbyists and employers may say that they will choose to leave the state over this issue - not true and an empty threat.  Where are they going to go?  California with higher taxes and a high cost of living?  A surrounding state such as ID, WY, NV, CO - there isn't enough technology talent nor venture equity there.  Again, this is completely unnecessary.
The Utah Technology Council (UTC) is opposing this bill and had it amended to include the two-year post employment clause because it benefits employer business owners.  It's these employer business owners that pay the membership fees of the Utah Technology Council, not their employees.  The vast majority of what the Utah Technology Council does is very positive for the state of Utah and its employers and employees - this is one of few cases that I can think of over the last 10 years where the UTC is not representing both sides and favoring the paying party being the employers as opposed to supporting the employees of its member organizations.  I understand that the UTC is in a difficult situation on this situation - they inevitably know that the current laws and the amended version of House Bill 251 stifle innovation and competition but are probably feeling the need to be loyal to the member business owners who pay its membership fees thus funding the UTC. 
Why Are the Current Post Employment Restrictions Unnecessary and Go To Far?
Especially in the technology sector, intellectual property is protected through patents as well as non-compete and non-solicitation agreements during an employee's employment status.  Protection beyond employment, after an employee has left is unnecessary and is already protected by the two preceding measures.  Having flown to Silicon Valley almost every other week for the last six years I have observed that although the state of California has many things wrong including tax philosophy and a high cost of living, it does have a very healthy and growing technology sector which is fueled by innovation and competition.  This in turn is catalyzed by much of what we already have in Utah  - an educated workforce and capital.  The original version of House Bill 251 is the one key missing ingredient to the complete Utah's innovation recipe.  The state of California got this right a long time ago by not allowing restrictive post employment clauses from day one of employment separation and is one of the key ingredients that has led to a booming technology sector in Silicon Valley.  Let's amend the current version and go back to the original version of House Bill 251 to get this ingredient right and continue on the positive creation of our own Silicon Slopes. 

Let's amend these antiquated laws that unnecessarily protect the employer minority who already have wealth and enable others to create the same type of wealth,  more jobs, and additional employment options for Utahans without being "employment trapped".  We have one of the best technology states in the country  - fast growing,  largest amount of venture investment per capita, a our favorable tax structure (thank you legislature and governor), a low cost of living, and an educated workforce.  Let's remove this existing unnecessary barrier to get the entire recipe right.

Ironically, I was made aware of this issue by an email from Richard Nelson who is and has been asking all Utah Technology members AND its employees to oppose this Bill or dramatically amend it which the UTC and its lobbyists have already successfully accomplished.  I have tremendous respect for Richard Nelson and the UTC, but do not support this bill in its current amended status.  In this case, what's good for the goose (employers) is not what's good for the gander (employees).  Please, let's support the original version of House Bill 251 as Mike Schultz introduced and intended it to be.


Respectfully,

Anonymous Utah Technology Executive
Husband and Father of Four
Future Business Owner and Job Creator
Citizen of Utah