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2016 Utah Legislative Session Employment Law Update

In its 2016 session, the Utah Legislature passed a handful of bills that Utah employers will need to take into account in their workplace policies and procedures. The three bills discussed below were passed by the legislature, signed by the Governor, and are scheduled to go into effect on May 10, 2016.

Utah Enacts New Laws Addressing Post-Employment Restrictions and Unauthorized Computer Use

Utah has enacted two new laws of importance to employers concerned about trade secrets, customer relationships, and other protectable interests in its 2016 legislative session. The first statute, the Post-Employment Restrictions Act (Utah Code § 34-51-101, et seq.), sets a one-year time limit on non-competition agreements entered into on or after May 10, 2016. The second statute, the Computer Abuse and Data Recovery Act (Utah Code § 63D-3-103, et seq.), establishes a state cause of action with an arguably broader reach than the Computer Fraud and Abuse Act (18 U.S.C. § 1030).

Utah Enacts Post-Employment Restrictions Act

A growing number of states are tightening conditions on restrictive covenants. The start of 2016 saw Oregon and Alabama enact higher barriers to the enforcement of non-compete agreements in those states.1 As of March 22, 2016, Utah has now joined their ranks with its “Post-Employment Restrictions Act,” HB 251.

Utah Governor Signs Law Restricting Post-Termination Noncompete Agreements

On March 22, 2016, Utah Governor Gary Herbert signed into law the Post-Employment Restrictions Act (H.B. 251), which limits the duration of post-employment noncompete agreements between employers and employees to a maximum of one year from the employee’s date of separation. Under the new law, any such agreement containing a noncompete restriction exceeding the Act’s one-year limitation will be deemed void. The law will take effect on May 10, 2016, and apply to all agreements entered into on or after that date.

Utah Has a Bun in the Oven: Pregnancy Bill Awaits Governor’s Approval

The Utah State Legislature recently passed S.B. 59, a bill that would amend the Utah Antidiscrimination Act to require employers with 15 or more Utah employees to provide reasonable accommodations related to pregnancy, childbirth, breastfeeding, or related conditions. The bill is currently awaiting the governor’s signature.

Utah Supreme Court Expands Wrongful Discharge Claims to Recognize Self-Defense as Public Policy

The Utah doctrine of wrongful discharge claims recognizes self-defense as a clear and substantial public policy under limited circumstances, the Utah Supreme Court has ruled in a 4-1 decision that expands the state’s exceptions to the at-will employment doctrine. Ray, et al. v. Wal-Mart Stores, Inc., 2015 UT 83 (Sept. 17, 2015).

Utah Supreme Court Adopts Presumption of Harm in Trade Secret Litigation

In a 3-2 decision, the Utah Supreme Court has held that there is a presumption of harm for claims made under the Utah Uniform Trade Secrets Act, Utah Code § 13-24-1, et seq., and for claims for breach of a non-disclosure agreement when a former employee takes confidential information or trade secrets from her recent employer. InnoSys v. Mercer, 2015 UT 80 (Aug. 28, 2015).
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