Utah has become a hub for company growth and innovation, especially in an area known as the “Silicon Slopes.” Well-known companies, like Qualtrics, Adobe, and eBay, have offices along the Wasatch Front. With such newfound relevance in the business community, it may seem odd that Utah’s legislature recently passed the Post-Employment Restrictions Act, which some say threatens Utah’s position as a state where businesses thrive. The Act restricts non-compete agreements to periods not greater than one year and automatically penalizes, through attorney’s fees and costs, any employer who tries to enforce a non-compete agreement that a court later finds unenforceable for any reason. The attorney’s fees penalty is particularly troubling for employers because Utah’s common law, which the Act did not affect aside from time restrictions, is difficult to navigate when drafting noncompete agreements. The most problematic common-law elements for employers to meet include whether the non-compete agreement is necessary to protect goodwill and whether the agreement’s geographic scope is reasonable. Misinterpreting these common-law elements could prove extremely costly to employers. This Comment puts forth a solution for employers who want to protect their investment in employee training, proprietary and confidential information, and goodwill, but who are wary of being penalized because a court may find its noncompete agreement unenforceable.
A Solution to Utah’s Non-Compete Dilemma: Soliciting the Use of Non-Solicitation Agreements,
2017 BYU L. Rev.
Available at: https://digitalcommons.law.byu.edu/lawreview/vol2017/iss5/8