1     
POST-EMPLOYMENT RESTRICTIONS AMENDMENTS

2     
2020 GENERAL SESSION

3     
STATE OF UTAH

4     
Chief Sponsor: Kirk A. Cullimore

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House Sponsor: ____________

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7     LONG TITLE
8     General Description:
9          This bill modifies provisions related to post-employment restrictive covenants.
10     Highlighted Provisions:
11          This bill:
12          ▸     modifies the permissible scope of a post-employment restrictive covenant; and
13          ▸     makes technical changes.
14     Money Appropriated in this Bill:
15          None
16     Other Special Clauses:
17          None
18     Utah Code Sections Affected:
19     AMENDS:
20          34-51-201, as last amended by Laws of Utah 2019, Chapter 132
21     

22     Be it enacted by the Legislature of the state of Utah:
23          Section 1. Section 34-51-201 is amended to read:
24          34-51-201. Post-employment restrictive covenants.
25          (1) (a) Except as provided in Subsection (2) and in addition to any requirements
26     imposed under common law, [for a post-employment restrictive covenant entered into] an
27     employer and an employee may not enter into a post-employment restrictive covenant:
28          (i) on or after May 10, 2016, [an employer and an employee may not enter into a
29     post-employment restrictive covenant] for a period of more than one year from the day on
30     which the employee is no longer employed by the employer[.]; or
31          (ii) on or after May 12, 2020, that:
32          (A) is broader than necessary to protect the legitimate business interests of the
33     employer;
34          (B) applies to a geographic area that is larger than the geographic area in which the
35     employer has significant presence or influence; or
36          (C) imposes a hardship on the employee that is undue or is disproportionate to the
37     benefit to the employer.
38          (b) A post-employment restrictive covenant that violates this [subsection] Subsection
39     (1) is void.
40          (2) (a) Subject to Subsection (2)(b), a post-employment restrictive covenant between a
41     broadcasting company and a broadcasting employee is valid only if:
42          (i) the broadcasting employee is an exempt broadcasting employee;
43          (ii) the post-employment restrictive covenant is part of a written employment contract
44     of reasonable duration, based on industry standards, the position, the broadcasting employee's
45     experience, geography, and the parties' unique circumstances; and
46          (iii) (A) the broadcasting company terminates the broadcasting employee for cause; or
47          (B) the broadcasting employee breaches the employment contract in a manner that
48     results in the broadcasting employee no longer being employed by the broadcasting company.
49          (b) A post-employment restrictive covenant described in Subsection (2)(a) is
50     enforceable for no longer than the earlier of:
51          (i) one year after the day on which the broadcasting employee is no longer employed by
52     the broadcasting company; or
53          (ii) the day on which the original term of the employment contract containing the
54     post-employment restrictive covenant ends .
55          (c) A post-employment restrictive covenant between a broadcasting company and a
56     broadcasting employee that does not comply with this subsection is void.