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The Utah State Legislature is currently considering legislation that would significantly limit the use of non-compete agreements in Utah. Senate Bill 46 (SB 46) has passed the Senate and received a favorable recommendation from the Utah House Business and Labor Interim Committee. The bill adds to restrictions the Utah State Legislature enacted in 2016, which limited post-employment enforcement of non-compete agreements to one year. Under the proposed bill, the Legislature would also restrict the reasons for which an employer can seek a non-compete agreement.
Under current law, non-compete agreements in Utah must be no longer than one year, limited to a reasonable geographic area, and intended to protect only legitimate business interests of the employer. Under common law, legitimate business interests supporting enforcement of a non-compete agreement have included a range of sensitive business information, like