A bill that was purported to affect 95 percent of Utah workers now has a zero percent chance of passage in the current legislative general session.
HB203, which would have altered the use of noncompete agreements between companies and employees, likely will be subject to further study during interim committee meetings this year.
The bill had advanced out of the House Business, Labor and Commerce Committee by a 10-3 vote, with a vow of further refinement during the general session. However, before a full House vote, the bill was sent to the House Rules Committee, which often is a legislative graveyard.
Salt Lake Business Journal attempts to contact the bill’s sponsor, Rep. Tyler Clancy, R-Provo, for comment were unsuccessful. But the legislation’s status as dead for the current general session was confirmed by a speaker at the recent Salt Lake SHRM Employment Law Update in West Jordan and by BioUtah, which said it will be referred for consideration during interim meetings “to be more acceptable to all stakeholders.”
Representatives of BioUtah and the Utah Chamber were among those at the committee hearing to call for interim-period study of the bill.
As passed out of committee, HB203 would have prohibited employers from enforcing a noncompete agreement (NCA) for employees earning less than $155,000, independent contractors, students, interns, workers under age 18, nonexempt (low-income workers) and workers laid off by their company without getting severance. It required upfront disclosure of NCAs during a job offer, and it provided a right of action for unlawful NCAs. The bill would not have affected non-solicitation, nondisclosure, confidentiality or training repayment agreements.
The sponsor and other proponents contended that NCA use had become too broad and, in some cases, harmful to employees. Some said it unnecessarily limited employee mobility or their ability to start their own companies.