Representative Brian M. Greene proposes the following substitute bill:





Chief Sponsor: Brian M. Greene

Senate Sponsor: ____________


9     General Description:
10          This bill amends provisions related to post-employment restrictive covenants.
11     Highlighted Provisions:
12          This bill:
13          ▸     outlines the scope of the chapter;
14          ▸     addresses consideration and termination of employment as they relate to
15     post-employment restrictive covenants;
16          ▸     restricts the time for bringing an action to enforce post-employment restrictive
17     covenants; and
18          ▸     makes technical changes.
19     Money Appropriated in this Bill:
20          None
21     Other Special Clauses:
22          None
23     Utah Code Sections Affected:
24     AMENDS:
25          34-51-201, as enacted by Laws of Utah 2016, Chapter 153

26     ENACTS:
27          34-51-103, Utah Code Annotated 1953
28          34-51-302, Utah Code Annotated 1953

30     Be it enacted by the Legislature of the state of Utah:
31          Section 1. Section 34-51-103 is enacted to read:
32          34-51-103. Scope of chapter.
33          (1) Consistent with this chapter, a court of competent jurisdiction determines whether a
34     post-employment restrictive covenant is enforceable.
35          (2) Notwithstanding Subsection (1), nothing in this chapter prohibits an employer or
36     employee from seeking to enforce or challenge a post-employment restrictive covenant through
37     arbitration.
38          Section 2. Section 34-51-201 is amended to read:
39          34-51-201. Post-employment restrictive covenants.
40          (1) In addition to any requirements imposed under common law, for a
41     post-employment restrictive covenant entered into on or after May 10, 2016, an employer and
42     an employee may not enter into a post-employment restrictive covenant for a period of more
43     than one year from the day on which the employee is no longer employed by the employer.
44          (2) (a) An employer may not enforce a post-employment restrictive covenant against an
45     employee if:
46          (i) at the time the post-employment restrictive covenant is executed, the employee:
47          (A) is employed by the employer; and
48          (B) does not receive new consideration such as an increase in wages or a promotion; or
49          (ii) without cause, the employer terminates the employment of the employee within six
50     months of the date on which the employee executes the post-employment restrictive covenant.
51          (b) For purposes of Subsection (2)(a)(i), continuation of employment of an existing
52     employee is not consideration for a post-employment restrictive covenant.
53          (3) A post-employment restrictive covenant that violates this section is void.
54          Section 3. Section 34-51-302 is enacted to read:
55          34-51-302. Timing of action.
56          An employer may not bring an action to enforce a post-employment restrictive covenant

57     after the day on which the time period stated in the post-employment restrictive covenant
58     expires.