Legislators Launching Survey on Non-Compete Contracts

Utah State CapitolThe Legislature will spend about $50,000 to pay half the cost of an extensive public opinion survey on non-compete contracts, which more and more employers are demanding their employees sign to get or keep a job.

“This is one of the hottest” issues now coming in many business sectors, especially high-tech firms, says House Speaker Greg Hughes, R-Draper.

Cicero group is working with legislative leaders and both sides of the issue – employees and employers. The GOP legislative leaders have promised to pay half of the data collection process – with various groups picking up the other half.

The report will be finished by the start of the 2017 Legislature in late January.

In the 2016 session, Hughes helped Rep. Mike Schultz, R-Hooper, with HB251, which went through 10 substitute bills – and that is a lot.

In the end, Hughes told his open GOP House caucus on Wednesday, even the rather mild compromise law is getting heat. The bill says any non-compete agreement automatically rescinds after 12 months.

“Quite literally,” said Hughes, “You have cases out there where if you are a sandwich maker at Jimmy Johns, you sign a non-compete, and you can’t go to work making sandwiches at Subway if you quit,” said Hughes.

Non-competes are now one of the cutting edge issues, and Utah, before HB251, had no statute on them at all.

And many business sectors and individual firms have gone way beyond what was initially considered a legitimate non-compete – protection of private business data, like formulas, client lists, manufacturing techniques and such.

In a way, the non-compete issue is a continuation of Hughes’ management style – getting out in front of issues to solve matters before the battle takes place in Capitol hallways among lobbyists and other special interest groups.

Hughes said he and Schultz started the non-compete debate in the 2016 session believing it was not going to be too difficult to deal with.

But HB251 soon became “one of the most hated” bills of the session, said Hughes.

Hughes, nor Senate President Wayne Niederhauser, R-Sandy, may have the authority to commit the state to such joint agreements/studies outside of a general session, and formal action by the Legislature.

But this seems to be the direction Hughes, Niederhauser, and other GOP leaders are taking to solve concerns outside of the 45-day general sessions.

House Republicans will be sent the 16th draft of the Cicero group survey for suggestions. “But we are past” wholesale changes to the survey, and Hughes asked his caucus not to send out the survey to battling parties, who may try to bias the data collecting even before it starts.

It’s anticipated that Schultz will further refine the new law in the 2017 session.