December 19, 2020

Utah Non Compete Agreements

In extreme cases, a non-compete clause prohibiting an employee from competing anywhere in the United States or around the world is probably unenforceable. It is almost depressing and inappropriate to try to prohibit a professional from using his skills everywhere. (However, depending on the facts, it can sometimes be useful to prohibit competition across the country.) On the other hand, if the non-competition clause only prohibits the worker from forming a quarter of a kilometre from the employer`s business, that restriction is likely to reasonably protect the legitimate interests of the employer. For example, it seems unfair to allow a former employer to set up exactly the same business next door and steal the former employer`s clients. What happens if someone violates a non-compete clause? Employers can ask a court to impose non-competitive agreements by imposing injunctions that deter the former employee from behaving in violation of non-competition rules. This type of order is called a declaration of omission. The court may also induce the worker to pay the employer any harm caused by the violation of the non-competition clause. If, for example, the employer can prove that the employee is responsible for a decline in the profits or value of the company, the employee may be responsible for those losses. However, these types of losses can be difficult to prove, and courts will generally not force employees to pay speculative and uncertain damages. Given the recent interest of the legislature and the technology community in participating in non-compete bans, employers should expect Utah to continue to review and limit its use, particularly for low-wage workers and technology employees. Given the significant results of the competition admission survey when value added is provided, the additional consideration introduced in 2017 can also be verified. As the 2018 Legislature approaches, employers would be advised to pay attention to the ongoing debate in the technology sector, where some are in favour of limiting the use of competition policy, and in well-established sectors, often more dependent on non-competition bans.