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Rolly: Legislature champions free market, with exceptions

Published February 29, 2016 9:38 am
This is an archived article that was published on sltrib.com in 2016, and information in the article may be outdated. It is provided only for personal research purposes and may not be reprinted.

Rep. Mike Schultz, R-Hooper, is championing a bill to eliminate "non-compete" provisions in employment contracts that forbid an employee from going to work for a competitor for a certain period after leaving the business.

Chambers of commerce and entrepreneurial companies, particularly in high-tech industries, are opposed to the bill because of fears an employee can take his or her trade secrets and undermine the fruits of the company's own research. But some of those non-compete agreements seem a bit silly.

Schultz reportedly is running the bill, HB251, at the behest of House Speaker Greg Hughes, R-Draper, who became concerned when a constituent complained he was forced to sign a non-compete agreement with a deli chain. In other words, he couldn't take his sandwich-making skills to another restaurant.



The idea behind Schultz's bill is that such contracts stifle the free market for skilled employees and make it harder for companies to hire good talent, plus it discourages creative entrepreneurs who would like to start a new business.

So the bill is being sold as a blow for the "Free Market."

When Schultz brought his bill to the House floor last week, however, the fun and games began.

Apparently Schultz, in his first term, had missed the traditional "freshman hazing" in his first session last year, so when he brought up his non-compete bill, he got hazed.

When the vote came, the electronic vote board began to fill with red lights, meaning "no" votes. Then green lights — "yes" votes — started showing up and most of the red lights quickly turned to green, and the bill passed with a unanimous vote.

But when Schultz stepped up to have a photo snapped with an all-green board behind him, House members began changing their votes back to "no."

In the end, the vote was indeed unanimously affirmative.

But there is a more serious side to the antics of the Legislature.

While the "free market" Utah State House is protecting employees and entrepreneurs from "non-compete" agreements, it is leaving in place perhaps the biggest "non-compete" clause of all — the state's automobile dealer franchise laws.

Those laws are protectionist crony capitalism at its finest, kept in place by the generous campaign donations of new car dealers statewide.

Another freshman legislator, Kim Coleman, brought a bill to "legalize" selling Tesla all-electric cars at its showrooms last year. The new car dealers fought the bill to keep their market advantage in place, free of pesky competitors like Tesla's entrepreneur owner, Elon Musk.

Coleman's intentions were the same as Schultz's, to strengthen the free market by ending protectionist regulations that favor new car dealers at the expense of competition that ultimately benefits consumers.

This year, the House seems willing to accept a "compromise" that would finally allow Tesla to sell cars directly to Utah customers — a compromise Tesla can't quite stomach.

First, Tesla can't actually have an inventory of cars on hand to be sold locally, and they would not be allowed to actually sign a purchase agreement in their sales facility.

So other than that, the Utah House remains the "Beacon of the Free Market."

prolly@sltrib.com —

 

 

 

 

 

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