7 LONG TITLE
8 Committee Note:
9 The Business and Labor Interim Committee recommended this bill.
10 Legislative Vote: 14 voting for 0 voting against 6 absent
11 General Description:
12 This bill amends provisions related to post-employment restrictive covenants.
13 Highlighted Provisions:
14 This bill:
15 ▸ defines terms;
16 ▸ modifies the permissible scope of a post-employment restrictive covenant; and
17 ▸ makes technical changes.
18 Money Appropriated in this Bill:
20 Other Special Clauses:
22 Utah Code Sections Affected:
24 34-51-102, as last amended by Laws of Utah 2018, Chapter 465
25 34-51-201, as last amended by Laws of Utah 2019, Chapter 132
27 Be it enacted by the Legislature of the state of Utah:
28 Section 1. Section 34-51-102 is amended to read:
29 34-51-102. Definitions.
30 As used in this chapter:
31 (1) "Broadcasting employee" means an employee of a broadcasting company.
32 (2) "Broadcasting company" means a person engaged in the business of:
33 (a) distributing or transmitting electronic or electromagnetic signals to the general
34 public using one or more of the following:
35 (i) television;
36 (ii) cable; or
37 (iii) radio; or
38 (b) preparing, developing, or creating one or more programs or messages for
39 distribution or transmission by means described in Subsection (2)(a).
40 (3) "Exempt broadcasting employee" means a broadcasting employee who is
41 compensated on a salary basis, as defined in 29 C.F.R. Sec. 541.602, at a rate equal to or
42 greater than the greater of:
43 (a) $913 per week, or an equivalent amount if calculated for a period longer than one
44 week; or
45 (b) the rate at which an employee qualifies as exempt under the Fair Labor Standards
46 Act, 29 U.S.C. Sec. 213(a) on a salary basis as defined in 29 C.F.R. Part 541.
47 (4) "Legitimate business interest" means an employer's:
48 (a) trade secrets;
49 (b) intellectual property;
50 (c) business plans;
51 (d) business processes and practices;
52 (e) customers;
53 (f) customer lists;
54 (g) customer referral sources;
55 (h) goodwill; or
56 (i) financial and marketing information.
58 compete" or "noncompete agreement," means an agreement, written or oral, between an
59 employer and employee under which the employee agrees that the employee, either alone or as
60 an employee of another person, will not compete with the employer in providing products,
61 processes, or services that are similar to the employer's products, processes, or services.
62 (b) "Post-employment restrictive covenant" does not include nonsolicitation
63 agreements or nondisclosure or confidentiality agreements.
65 merger, or other method of the tangible or intangible assets of a business entity, or a division or
66 segment of the business entity.
67 Section 2. Section 34-51-201 is amended to read:
68 34-51-201. Post-employment restrictive covenants.
69 (1) (a) Except as provided in Subsection (2) and in addition to any requirements
70 imposed under common law, [
71 employer and an employee may not enter into a post-employment restrictive covenant:
72 (i) on or after May 10, 2016, [
74 which the employee is no longer employed by the employer[
75 (ii) on or after May 5, 2021, that:
76 (A) is broader than necessary to protect the legitimate business interests of the
77 employer; or
78 (B) applies to a geographic area that is larger than the geographic area in which the
79 employer has significant presence or influence.
80 (b) A post-employment restrictive covenant that violates this [
81 (1) is void.
82 (2) (a) Subject to Subsection (2)(b), a post-employment restrictive covenant between a
83 broadcasting company and a broadcasting employee is valid only if:
84 (i) the broadcasting employee is an exempt broadcasting employee;
85 (ii) the post-employment restrictive covenant is part of a written employment contract
86 of reasonable duration, based on industry standards, the position, the broadcasting employee's
87 experience, geography, and the parties' unique circumstances; and
88 (iii) (A) the broadcasting company terminates the broadcasting employee for cause; or
89 (B) the broadcasting employee breaches the employment contract in a manner that
90 results in the broadcasting employee no longer being employed by the broadcasting company.
91 (b) A post-employment restrictive covenant described in Subsection (2)(a) is
92 enforceable for no longer than the earlier of:
93 (i) one year after the day on which the broadcasting employee is no longer employed by
94 the broadcasting company; or
95 (ii) the day on which the original term of the employment contract containing the
96 post-employment restrictive covenant ends .
97 (c) A post-employment restrictive covenant between a broadcasting company and a
98 broadcasting employee that does not comply with this subsection is void.