Rep. Norm Thurston — Voting Record

Bill

Number

H.B. 251 Tenth Substitute (2016GS)

Sponsor

Rep. Schultz, M.

Final action

Governor Signed 3/22/2016

Outcome

Became law — signed by Gov. Gary R. Herbert

Summary

What it does

• This bill:
• enacts the Post-Employment Restrictions Act, including:
• defining terms;
• addressing post-employment restrictive covenants;
• addressing exceptions; and
• addressing remedies.

Every vote on this bill

Bill text

POST-EMPLOYMENT RESTRICTIONS AMENDMENTS
GENERAL SESSION
STATE OF UTAH
Chief Sponsor: Mike Schultz
Senate Sponsor: 
J. Stuart Adams
Cosponsors:
Rebecca Chavez-Houck
Scott H. Chew
Kim Coleman
Susan Duckworth
Justin L. Fawson
Francis D. Gibson
Brian M. Greene
Timothy D. Hawkes
Sandra Hollins
Gregory H. Hughes
Don L. Ipson
Michael S. Kennedy
Brad King
Brian S. King
John Knotwell
Daniel McCay
Michael E. Noel
Derrin Owens
Paul Ray
Angela Romero
Scott D. Sandall
V. Lowry Snow
Robert M. Spendlove
Jon E. Stanard
Norman K Thurston
Brad R. Wilson
LONG TITLE
General Description:
This bill enacts provisions related to post-employment restrictive covenants.
Highlighted Provisions:
This bill:
▸ enacts the Post-Employment Restrictions Act, including:
• defining terms;
• addressing post-employment restrictive covenants;
• addressing exceptions; and
• addressing remedies.
Money Appropriated in this Bill:
None
Other Special Clauses:
None
Utah Code Sections Affected:
ENACTS:
34-51-101
, Utah Code Annotated 1953
34-51-102
, Utah Code Annotated 1953
34-51-201
, Utah Code Annotated 1953
34-51-202
, Utah Code Annotated 1953
34-51-301
, Utah Code Annotated 1953
Be it enacted by the Legislature of the state of Utah:
Section 1. Section 
34-51-101
 is enacted to read:
CHAPTER 51. POST-EMPLOYMENT RESTRICTIONS ACT
Part 1. General Provisions
 34-51-101.
Title.
This chapter is known as the "Post-Employment Restrictions Act."
Section 2. Section 
34-51-102
 is enacted to read:
 34-51-102.
Definition.
As used in this chapter:
(1) (a) "Post-employment restrictive covenant," also known as a "covenant not to
compete" or "noncompete agreement," means an agreement, written or oral, between an
employer and employee under which the employee agrees that the employee, either alone or as
an employee of another person, will not compete with the employer in providing products,
processes, or services that are similar to the employer's products, processes, or services.
(b) "Post-employment restrictive covenant" does not include nonsolicitation
agreements or nondisclosure or confidentiality agreements.
(2) "Sale of a business" means a transfer of the ownership by sale, acquisition, merger,
or other method of the tangible or intangible assets of a business entity, or a division or
segment of the business entity.
Section 3. Section 
34-51-201
 is enacted to read:
Part 2. Scope of Post-Employment Restrictions
 34-51-201.
Post-employment restrictive covenants.
In addition to any requirements imposed under common law, for a post-employment
restrictive covenant entered into on or after May 10, 2016, an employer and an employee may
not enter into a post-employment restrictive covenant for a period of more than one year from
the day on which the employee is no longer employed by the employer. A post-employment
restrictive covenant that violates this section is void.
Section 4. Section 
34-51-202
 is enacted to read:
 34-51-202.
Exceptions.
(1) This chapter does not prohibit a reasonable severance agreement mutually and
freely agreed upon in good faith at or after the time of termination that includes a
post-employment restrictive covenant. A severance agreement remains subject to any
requirements imposed under common law.
(2) This chapter does not prohibit a post-employment restrictive covenant related to or
arising out of the sale of a business, if the individual subject to the restrictive covenant receives
value related to the sale of the business.
Section 5. Section 
34-51-301
 is enacted to read:
Part 3. Remedies
 34-51-301.
Award of arbitration costs, attorney fees and court costs, and damages.
If an employer seeks to enforce a post-employment restrictive covenant through
arbitration or by filing a civil action and it is determined that the post-employment restrictive
covenant is unenforceable, the employer is liable for the employee's:
(1) costs associated with arbitration;
(2) attorney fees and court costs; and
(3) actual damages.