White House Releases State Call to Action Initiative on Non-Compete Agreements

The White House released suggested policy objectives in their State Call to Action on Non-Compete Agreements.

Included in these guidelines are suggestions from a working group convened earlier this year that Speaker Greg Hughes and Representative Mike Schultz were pleased to be a part of.  

“It was our honor to collaborate, in a bipartisan way, to help develop recommendations that will not only benefit employees in Utah but individual workers across the country,” said Speaker Greg Hughes. “Companies should not have the right to treat people as property and the elimination of most non-compete agreements makes such treatment significantly less likely. The result of state-level reforms will increase the free flow of the workforce and the competition within it.” 

During the 2016 legislative session, Rep. Mike Schultz sponsored H.B. 251 that limited post-employment restrictive covenants, known as non-compete agreements, to one year and established that if a non-compete agreement is determined unenforceable through arbitration or civil action then the employer is liable for costs and damages to the employee. This bill will result in less abuse and misuse of non-compete agreements.  

“Here in Utah we strongly believe in the freedom of employers to hire and fire at will,” said Representative Mike Schultz. “We also must, just as vigorously, defend the rights of workers to pursue employment opportunities within their field of expertise. That is our free market economy in action. This state call to action framework will help us build on the progress we made in Utah to ensure employees are able to use their best skills to provide for their family.”

Entrepreneur Josh James, founder and CEO of the Utah-based technology company Domo, added his support: “Non-compete agreements, by their name, fly in the face of competition by stifling the free market for good talent, making it harder for companies to hire and discouraging entrepreneurs from starting new businesses,” said James. “I am encouraged by the national call to action for the elimination of non-competes across all states. Eliminating non-competes will make our economy stronger by requiring employers to up their game and build better companies and better products that attract and retain great talent.”

During the debate on H.B. 251, several stakeholders in Utah came together to form an informal working group on non-compete agreements. This group has been focused on gathering information and data to inform any future legislative action. The results of that effort, as well as the recommendations and reports coming from the White House, will bolster policy discussions and recommendations on post-employment restrictive covenants in Utah.