This is an archived article that was published on sltrib.com in 2016, and information in the article may be outdated.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.
After heavy lobbying by businesses, the Senate passed a bill Wednesday that originally would have prohibited clauses in contracts that ban employees from working for competitors after they leave jobs but now would allow them, with restrictions.
That action came even though the House previously unanimously passed HB251, and House Speaker Greg Hughes pushed hard for it.
But the Senate passed the watered-down bill on a 22-6 vote, and sent it back to the House for further consideration.
Among the few restrictions on non-compete agreements now in the bill is limiting to one year the period that an employee could not work for a competitor after leaving a job.
Also, if an employer tries to enforce a non-compete clause but loses the legal action, he or she could be held liable for the court costs.
The Senate also added amendments to clarify that it does not ban severance agreements when an employee leaves a job that include non-compete clauses in exchange for compensation. It also clearly allows confidentiality agreements between employers and workers.
HB251 says that when an employer sells a business, all existing non-compete clauses are void.
After the House approved the bill earlier, the Salt Lake Chamber and other business interests battled against it arguing that non-compete clauses are important to protect many companies and their trade secrets.
Hughes said last week that erasing non-compete laws is especially important in Utah because it is a right-to-work state, where employers may fire workers for any reason.
"If you are a right-to-work state, the public needs the right to walk. Fire them for any reason, but they have to be able to fill out an application and get a job…. This was never meant to be employees as property" where some employers essentially could fire people and keep them from working in the field, he said.
Also, some high-tech companies argued that erasing non-compete clauses would help them attract workers in the state who want to avoid them elsewhere.