Alert: Bill Would Eliminate Non-Competes

Lane Beattie, President and CEO of the Salt Lake Chamber, issued the following press release today, reprinted here verbatim:

“I want to raise your awareness to a piece of legislation: H.B. 251. This would eliminate post-employment restrictions on competition, commonly known as non-compete clauses. We are significantly concerned about the scope of this legislation and its potential impact on businesses in every sector. We need your support to ensure the business community’s concerns are addressed. The current bill seems to move Utah to mirror a very small number of states (5) in restricting an employer’s ability to protect trade secrets, confidential information, client relationships, goodwill, or workforce needs through non-complete clauses on all future contracts.

Some individuals and companies have required every member of their company to sign a non-compete, even those on the front line. This is a legitimate concern that could be addressed with more simple measures and without impacting all business.

What we are doing about it: This past week, Speaker Hughes joined our Executive Board to discuss this Legislation. Our Chamber staff and I have also met directly with the sponsor, Rep. Mike Shultz, to inform him of our concerns regarding the unintended consequences of his bill on the impact of protecting employers’ legitimate business interests. The sponsor believes that there are legitimate protections already outside of non-compete clauses for these concerns. Rep. Shultz continues to be willing to listen to stakeholders. Additionally, it should be noted that Michael Parker from our staff testified at the House committee hearing, sharing our concerns about the bill, as well as expressing our support for continued discussions. It should be noted that even with issues raised by the business community, the bill passed through 11-0 and headed to the house floor. This is extremely concerning.

What you can do about it: This is a critical issue for you as business leaders to directly engage on. As this process moves forward, we would encourage you to:

  • Document: Document how many non-competes your company is utilizing and process for who/when you use them. What would be the impact to your business if you were unable to use non-competes and why would other legal options not be adequately sufficient? You may want to include your legal counsel in this discussion as well. Please be as specific as possible and share this with our team Michael Parker (mmparker@slchamber.com) or Abby Albrecht (aalbrecht@slchamber.com).
  • Tap Your Resources: Make sure your other business associations, government affairs team and contract lobbyists are aware of and engaged in the issue. The business community must be as unified and as broad as possible on this issue.
  • Contact Your Representative and Senator: Please contact your State Representatives and Senator via a phone call (Click here to to identify and find contact info for your legislators) – and any others you have a relationship with – to begin to share the potential impact on your company if this bill in fact moves forward.

We will continue to work with the sponsor and other stakeholders to address this issue, but we need your leadership and engagement to unify the business community and express the urgency and significant harm to the business climate of our state this bill would have as currently drafted.”