2016 Utah Legislative Session Highlights

LegislativeArticle.BlogThe 2016 Utah Legislative Session wrapped up on March 10, 2016. Although Utah’s legislative session is short, the Legislature passed a number of bills that directly impact Utah employers. The bills, set forth below, must still be approved by Governor Gary Herbert:

SB 59: Amendments to Utah Anti-discrimination Act—For Pregnancy and Related Conditions: SB 59 amends the Utah Antidiscrimination Act and prohibits employers with 15 or more employees from discriminating against an employee who has known limitations related to pregnancy, childbirth, breastfeeding, or related conditions. SB 59 also requires employers to provide reasonable accommodation to an employee who requests it, unless granting accommodation would create an undue hardship on the employer. Employers may request certification from an employee’s health care provider prior to granting the request, but employers are prohibited from obtaining certification if the employee needs more frequent restroom, food, or water breaks. Employers must provide employees with notice of their rights in a conspicuous place and/or in their handbooks.

Utah Non-Compete Bill: After weeks of impassioned and collaborative discussions between state legislators and leaders in the business community, the Utah State Legislature passed a compromised version of HB 251. In essence, the bill places limitations on an employer’s ability to enter into post-employment restrictive covenants with its employees. The bill does not interfere with an employer’s ability to protect its confidential or proprietary information through non-solicitation, non-disclosure, or confidentiality agreements. But the bill does limit an employer’s ability to enter into non-compete agreements with employees and bars employers and employees from entering into post-employment restrictive covenants (non-competes), that last more than a year after the employee’s last date of employment. Under the new law, employers are still able to enter into “reasonable” severance agreements or agreements for the sale of a business that include a post-employment restrictive covenant that does not last for a period more than one year from the employee’s last date of employment. Utah common law still dictates that the geographical scope and market set forth in the restrictive covenant must be reasonable. Importantly, if an employer attempts to enforce an unenforceable post-employment restrictive covenant through arbitration or by filing a civil action, the employer will be responsible for the employee’s costs and attorney’s fees. Also of significance, this new law will only apply to post-employment restrictive covenants entered into on or after May 10, 2016.

Determination of Employer Status Amendments: HB 116 amends a number of existing Utah statutes to expressly provide that, subject to limited exceptions, “a franchisor will not be deemed to be the employer of a franchisee’s employees.” The bill precludes state agencies from considering federal administrative rulings when trying to determine whether companies may be joint employers. Federal administrative rulings may, however, be relied upon “if [the ruling has been found to be] generally applicable by a court of law, or adopted by a statute or rule.” This bill impacts the definition of “joint employer” in connection with payment of wages, antidiscrimination, health and safety, and unemployment insurance benefits.

Workers Compensation for Volunteers: SB 76 provides that a non-governmental entity may elect to cover all of its volunteers with workers’ compensation coverage under the same policy that the non-governmental entity covers its employees. If the non-governmental entity does elect to cover its volunteers, the volunteer “is considered an employee of the non-governmental entity” and workers’ compensation benefits will be the exclusive remedy the volunteer has for an industrial injury or disease. Electing to cover volunteers imposes notice and record-keeping requirements on the non-governmental entity.

Occupational Safety and Health Amendments: SB 33 amends the existing statute to protect employees who file a health and safety claim, cause a claim to be filed, testify and/or participate in any way in a claim under the Occupational Safety and Health Act (OSHA) from retaliation. This bill also provides a procedure for an employee to file a complaint with the Division of Occupational Safety and Health if the employee believes he or she has suffered retaliation.

This is not intended to be an all-inclusive list of bills that may affect Utah employers. If you have questions about how these or other bills that the Utah State Legislature passed may affect your organization, contact your MSEC representative.