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Hancey Law Offices

Hancey Law Offices

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One-Year Limitations on Non-Compete Agreements in Utah

The Utah Legislature passed statutory restrictions on Non-Compete Agreements contained in § 34-51-201 of the Utah Code which is entitled “Post-Employment Restrictive Covenants.” In short, an employer and an employee may not enter into a restrictive non-compete agreement for a period of more than one year from the day on which the employee is no longer employed by the employer. If the agreement exceeds that restrictive period it is void. These restrictions govern all agreements entered into after May 10, 2016.

The consequences of seeking to enforce a non-compete agreement beyond a year are severe. They include the right for the employee to recover costs, attorneys’ fees, and actual damages.

If you have employees currently bound by non-compete agreements that exceed a year, it would be wise to review and update them immediately.

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