Utah Non-Compete and Non-Solicitation Agreements: What Employers and Employees Need to Know

Non-compete and non-solicitation agreements are common tools used to protect customer relationships, confidential information, and investment in key personnel. These agreements are enforceable only when they meet statutory limits and long-standing court rules on reasonableness. Because a flawed restriction can trigger attorney fee exposure, both employers and employees benefit from reviewing enforceability before a dispute starts. This overview highlights the core rules under Utah business law that shape how restrictive covenants are written, challenged, and enforced.

Non-Compete and Non-Solicitation Agreements and Their Enforceability

Utah treats non-compete restrictions and non-solicitation restrictions differently, even though employers often place them in the same agreement. The first is governed by Utah’s Post-employment Restrictions Act plus common law requirements, while the second is excluded from that statute and is evaluated primarily under common law reasonableness principles.

Non-compete agreements

A non-compete agreement is a promise that, after employment ends, the worker will not compete by providing products, processes, or services similar to the employer’s offerings. For agreements entered into on or after May 10, 2016, Utah law generally bars an employer and employee from setting a non-compete longer than one year after the last day of employment, and a covenant that violates that time limit is void.

In addition to the one-year cap, Utah courts still evaluate whether the restriction is no greater than reasonably necessary, looking to factors such as geographic scope, duration, the employee’s duties, and the employer’s interest at stake, including goodwill and trade secrets. A recent decision, England Logistics v. Kelle’s Transport Service, illustrates how courts analyze these issues in practice and confirms that properly supported, one-year non-competes may be enforced under Utah law in appropriate circumstances.

Non-solicitation agreements

Non-solicitation agreements usually restrict the solicitation of customers, clients, or employees, and they are often narrower than non-competes because they focus on specific relationships rather than broad competitive activity.

Utah’s statute defining “post-employment restrictive covenant” expressly excludes non-solicitation agreements, along with nondisclosure and confidentiality agreements, which means the statutory one-year cap does not apply to non-solicitation by its own force. Even so, courts may still refuse enforcement if a non-solicitation restriction functions like a non-compete in scope or goes beyond what is reasonably necessary to protect legitimate interests. Utah’s business law authorities commonly describe enforceability as turning on a fact-based assessment tied to protectable interests such as customer goodwill and confidential information, rather than a desire to suppress ordinary competition.

The following statutory provisions deserve special attention because they can change the risk analysis for both sides.

• Utah recognizes exceptions for a reasonable severance agreement made at or after termination and for restrictions connected to the sale of a business, subject to common law requirements.
• If an employer seeks to enforce a post-employment restrictive covenant and it is determined to be unenforceable, the employer can be liable for the employee’s attorney fees, court costs, and actual damages.
• Federal developments remain a relevant background, but they do not replace Utah law for most private disputes. The Federal Trade Commission announced a final rule in 2024 that would have broadly barred many non-compete clauses, but it has not taken effect and has been blocked by court action, with the agency later taking steps to dismiss its appeal.

What Should You Know if You Are an Employer and Employee?

For employers

Enforcement starts with precision and proof. A court typically expects the restriction to match a legitimate business interest, such as protecting trade secrets, preserving customer goodwill, or safeguarding an extraordinary investment in training, and the scope should align with the role and the competitive risk posed by the departing worker, as shown in Robbins v. Finlay.

Employers should also plan for the possibility of early litigation, since temporary restraining orders and preliminary injunction requests often depend on fast, well-organized evidence, including clear job duties, access to confidential information, and identifiable customer relationships. The attorney fee rule under Utah’s statute makes it especially important to avoid overbroad non-competes that could be ruled unenforceable.

For employees

The key is to identify what the agreement actually restricts and what law applies to each clause. A non-compete signed on or after May 10, 2016, is generally capped at one year, and a longer duration can make the covenant void under the statute, which may shift leverage early in a dispute. Non-solicitation restrictions may not be subject to the statute’s one-year limit, but they still can be challenged if they are broader than necessary or if they operate as a disguised non-compete.

In practice, employees benefit from documenting the nature of their work, the customers they served, and whether the employer can point to specific confidential information or protectable goodwill, since Utah courts evaluate enforceability under reasonableness factors tied to the facts of the role.

A Guide for Employers and Employees

Knowing where Utah’s statute ends and where court-based standards begin can reduce disruption and limit litigation risk in business law disputes, and a business lawyer in Utah can assess the agreement language and explain practical options for the next step. Schedule a consultation with Weber Law Group today or call (801) 753-8084.