Utah’s Non-Compete Enforcement: Recent Trends and Drafting Strategies for Enforceable Agreements

Companies depend on reasonable post-employment covenants to protect customer relationships, proprietary data, and hard-won market share. At the same time, overly broad restraints chill mobility and can fail in court. The state therefore balances commercial fairness with worker freedom through the Post-Employment Restrictions Act, Utah Code § 34-51-101 et seq. (2024). If your business is starting in Utah or you are managing a mature enterprise, understanding today’s enforcement climate is essential.

Want to safeguard your competitive edge? Schedule a consultation with top-rated Utah business lawyers at Weber Law Group—we respond quickly, map risk, and draft agreements that stand up in court.

Utah’s Shifting Enforcement Climate

Courts and lawmakers have reshaped Utah business law on restrictive covenants over the past decade. Key trends include:

• Twelve-Month Statutory Ceiling
  Utah’s Post-Employment Restrictions Act voids any covenant that lasts “more than one year from the day on which the employee is no longer employed.”. Courts treat an overlong clause as entirely unenforceable, and the employer who tries anyway can be ordered to reimburse the worker’s litigation costs and attorney fees under § 34-51-301.
  

• Broadcast-Industry Carve-Out
  House Bill 241 (2018) added stricter limits for television, radio, and cable talent. A covenant is valid only when the employee:
  

1. 1. • earns more than $913 per week (the federal exempt-salary floor),
      • signs a contract with a term no longer than four years, and
      • is bound for the earlier of one year after departure or the contract’s natural expiration. Any restraint outside those parameters is void—and an employer that seeks to enforce it still faces fee-shifting.
        

• Role- and Pay-Proportionality in Practice
  Utah courts now scrutinize how compensation and duties match the covenant’s reach. In England Logistics v. Kelle’s Transport, the Court of Appeals upheld a nationwide, one-year restraint for senior freight-broker staff because their client portfolios spanned the United States; the same scope would likely fail for lower-earning sales reps.
  

• Trade-Secret Overlay Remains Available
  Even when a non-compete collapses, an employer can still win injunctive relief under the Utah Uniform Trade Secrets Act. The Supreme Court confirmed this path in InnoSys, Inc. v. Mercer, holding that proof of threatened disclosure can justify an injunction despite contractual defects.
  

• Automatic Fee-Shifting Raises the Stakes
  Section 34-51-301 makes employers liable for an employee’s fees, court costs, and damages whenever a covenant is declared void. The rule has fueled a noticeable uptick in fee petitions since 2019, as illustrated by awards in England Logistics after trial.
  

• Post-Pandemic Tailoring Expectations
  Recent cases emphasize that employers must tie a covenant to a current, concrete business interest, not just historical market conditions. In RainFocus v. Cvent, the Court of Appeals noted that competitive claims must relate to protectable interests rather than merely hamper a rival’s mobility.
  

Takeaway for Utah employers: draft with the one-year limit as a hard ceiling, calibrate scope to the employee’s actual reach and pay, consider narrow customer non-solicits plus strong NDAs, and remember that an overbroad agreement can turn into a company-paid fee award.

Drafting Strategies for Enforceable Agreements

A sound covenant anticipates statutory limits, evidentiary burdens, and employee morale. A corporate attorney can fortify agreements by observing six core principles:

1. Start with the Statute’s Checklist

Confirm the employee falls outside the broadcast carve-out, limit duration to 12 months, and define the restricted territory with objective markers—e.g., “accounts assigned in the 12 months preceding termination” instead of “any area where the company does business.”

1. Tie the Scope to Identifiable Goodwill
   Utah judges approve covenants when the geographic, customer, and activity limits mirror the employee’s real market reach. In England Logistics v. Kelle’s Transport Service, a nationwide one-year clause survived because senior brokers handled a national client base; the court noted the same reach would “likely fail” for a lower-level rep.
2. Offer Fresh Consideration for Mid-Stream Covenants
   Continued at-will employment can support a new non-compete, but Utah precedent recommends a tangible sweetener—promotion, bonus, or equity—to fend off “illusory modification” arguments. System Concepts v. Dixon upheld a mid-career covenant where the employee received a substantial raise and new title, stressing that good-faith continuation of employment constituted valid consideration.
3. Use a Severance-Style “Garden-Leave” When Longer Protection Is Needed
   The Post-Employment Restrictions Act exempts reasonable severance agreements negotiated “in good faith at or after termination.” If you plan to restrain a key executive for the full statutory year, pairing the covenant with continued salary or benefits during that period mimics U.K.-style garden leave and bolsters reasonableness.
4. Layer, Don’t Lump—Combine Narrow Covenants Courts often preserve customer non-solicitation and strong NDAs even if a broad non-compete falls. In InnoSys v. Mercer, the Utah Supreme Court granted injunctive relief under the Trade Secrets Act despite contractual defects, underscoring the value of parallel confidentiality tools.
5. Benchmark Liquidated-Damages Clauses
   Utah enforces a pre-set damages figure only when it is a reasonable forecast of probable loss; sums that “shock the conscience” are struck as penalties. Commercial Real Estate v. Comcast of Utah II reaffirmed this rule and supplied a blueprint: tie the number to historic margins, audit costs, or proven customer churn—not a punitive windfall.

Seal Your Competitive Edge—Call Weber Law Group Today

Utah’s one-year cap, fee-shifting rules, and evolving case law mean every covenant must walk a narrow line between protection and overreach. Our  guides employers statewide—from tech founders to manufacturers—through statute-aligned drafting, rapid enforcement, and pragmatic dispute resolution; consult a seasoned business lawyer that Utah companies trust and let us tailor agreements that courts respect, rivals fear, and talent accepts—contact us today.