Utah Law Now Restricts Noncompete Agreements to one (1) year.

Utah Law Now Restricts Noncompete Agreements to one (1) year.

Lexology (03/17/16)

Utah has enacted the Post-Employment Restrictions Act to regulate noncompete agreements. Beginning May 10, 2016, an employer and an employee may not agree to a postemployment restrictive covenant that lasts for more than one year from the day on which the employee is no longer employed by the employer. A restriction longer than one year is void.

The law expressly excludes the following types of agreements from the one-year temporal restriction: (1) nonsolicitation agreements; (2) nondisclosure agreements; (3) confidentiality agreements; (4) a "reasonable severance agreement mutually and freely agreed upon in good faith at or after the time of termination"; and (5) agreements related to the sale of a business. Each of these may include a temporal restriction that is longer than one year. Furthermore, an employer is liable for the employee's attorney fees, court or arbitration costs, and actual damages, if it seeks to enforce a postemployment restrictive covenant that is later found to be unenforceable.
 

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