Bill > HB0203

This bill amends existing Utah law regarding non-compete agreements, which are contracts where an employee agrees not to compete with their employer after their employment ends. Key changes include defining "nonexempt employee" as someone not exempt from overtime pay under the federal Fair Labor Standards Act (FLSA), and clarifying that "non-compete agreement" specifically refers to restrictions on competition, excluding nonsolicitation, nondisclosure, confidentiality, and training repayment agreements. The bill also limits the duration of most non-compete agreements to one year from the end of employment and introduces new restrictions, making them unenforceable against nonexempt employees, individuals under 18, students in short-term employment, or if the employee's annual earnings are below $155,000, or if the employee was terminated due to a reduction in force. Furthermore, employers must now provide non-compete agreements with job offers and give employees at least 14 days' written notice before the agreement becomes effective, and these provisions will take effect on May 6, 2026. The bill also clarifies that non-compete agreements related to the sale of a business are still permissible, and if an employer unsuccessfully tries to enforce a non-compete agreement that violates the law, they may be liable for the employee's damages, arbitration costs, and attorney fees, with employees also having a right to sue for violations and recover damages, injunctive relief, and costs.

Business and Industry

https://le.utah.gov/~2026/bills/static/HB0203.html