Non-Solicitation Clauses in Utah After the 2016 Reform
Utah's Post-Employment Restrictions Act
Utah enacted the Post-Employment Restrictions Act (Utah Code Section 34-51-101 et seq.) in 2016, which placed a one-year cap on non-compete agreements. However, the Act's application to non-solicitation clauses requires careful analysis.
Does the One-Year Cap Apply to Non-Solicitation?
The statute defines a "post-employment restrictive covenant" as an agreement that restricts a person from working for another employer for a specified period of time. Whether non-solicitation clauses fall under this definition is not entirely settled. Key considerations:
- Narrow non-solicitation clauses that target only specific customers may fall outside the Act's scope, as they do not restrict the employee from "working for" anyone
- Broad non-solicitation clauses that effectively prevent the employee from performing their job for a competitor may be treated as non-competes subject to the one-year cap
- Courts evaluate the practical effect, not just the label
Common Law Enforceability
Regardless of the statute, Utah courts apply common law principles to non-solicitation clauses:
- Protectable interest: Customer relationships, trade secrets, or confidential information
- Reasonable scope: Limited to customers the employee actually served
- Reasonable duration: If outside the Act's scope, courts apply a general reasonableness standard; one to two years is typically upheld
- Adequate consideration: Employment at the time of hiring is sufficient. For existing employees, the question of whether additional consideration is required is still developing in Utah law
- No undue hardship: The restriction should not prevent the employee from earning a living
Red Flags
- A clause so broad it effectively prevents you from working for competitors (likely subject to the one-year cap)
- Restrictions extending beyond your actual customer relationships
- Duration exceeding one year if the clause functions as a non-compete
- Vague definitions of restricted solicitation activities
- No consideration for mid-employment agreements
When to Consult a Lawyer
Consider reaching out to a Utah employment attorney if you are unsure whether your clause falls under the Post-Employment Restrictions Act, if the restriction seems to extend well beyond your actual customer base, or if a former employer is pursuing enforcement of a broad non-solicitation provision.
This article is for informational purposes only and does not constitute legal advice. Consult a licensed attorney for guidance specific to your situation.