Non-Compete Agreement Enforceability Utah

On March 27, 2018, the state amended its Non-Competition Obligations Act to impose special restrictions on employees in the broadcasting sector (see our article of April 2, 2018). In concrete terms, the 2018 amendment provided that, in order for a non-competition agreement to be implemented against an employee of a broadcasting company, the company must define the following elements: the main rule introduced by the new statutes provides that a non-competition clause cannot last more than one year. If it is the sequel, it is not valid. The new status applies mainly to non-competition prohibitions listed as conditions of employment. It does not apply to non-competition prohibitions that have been listed as terms of a compensation agreement, nor to those that have been listed as a condition for the sale of a business. The new status goes hand-in-hand with the restrictions already set by Utah jurisprudence. For example, non-competition prohibitions in Utah must be relatively narrow to protect only the legitimate interests of the employer. The factors considered by the courts to determine the appropriateness of a non-competition clause are: (i) geographic area restrictions; (ii) the nature of the worker`s obligations (for example. (b) that the worker provides special or unique services to the company; and (iii) the nature of the interests that the employer seeks to protect, such as trade secrets, the value of its business or an exceptional investment in the initial or continuing training of the worker. See Robbins v. Finlay, 645 pp.

2d 623 (1982). The adequacy of a non-competition clause is determined on a case-by-case basis. System Concepts, Inc. v. Dixon, 669, 2d 421 (1983). Between these two extremes are the location of most non-competition agreements, and whether they are geographically relevant depends on the unique facts and circumstances. Faced with this dilemma, employers of entrepreneurs have found a loophole. Instead of challenging their claims as a violation of a non-compete clause, more and more employers are repeating the same claims as „misappropriation of trade secrets“. In doing so, they reverse the balance in their favour and place all the responsibility on the former employee. How are they able to do that? The answer lies in the broad language of the Utah Es Trade Secret Act (UTSA). There are many reasons why Utah employers want their employees not to compete. Many employers invest a lot of time, training and money in their staff and a non-compete clause encourages a worker to stay with his or her employer instead of bringing their training and skills to another company.

In extreme cases, a non-compete clause prohibiting an employee from competing anywhere in the United States or around the world is probably unenforceable. It is almost depressing and inappropriate to try to prohibit a professional from using his skills everywhere. (However, depending on the facts, it can sometimes be useful to prohibit competition across the country.) On the other hand, if the non-competition clause only prohibits the worker from forming a quarter of a kilometre from the employer`s business, that restriction is likely to reasonably protect the legitimate interests of the employer. For example, it seems unfair to allow a former employer to set up exactly the same business next door and steal the former employer`s clients. There seems to have been limited media coverage of the latest change. However, Parliament found that the four-year cap on the duration of written contracts did not correspond to the realities of the broadcasting industry. As a result, the new law gives judges more leeway to assess the particular circumstances of the various parties before determining whether a non-competition agreement is appropriate and applicable. As usual, we are here to help. Let us know if you have any questions or if you would like us to design a non-competition for you or to verify your existing non-compete agreement.