2016-17 Non-Compete Study Results

Members of Utah’s Business Community,

Last session the Utah Legislature passed H.B. 251, statutorily limiting the effect of employer-employee, non-compete agreements to a one-year period following separation, and changing provisions related to legal remedies. During the debate and since that time, it has become evident that we need better information around this complex issue. Additionally, significant concern from the business community across the state has prompted a push for further research into how Utah employers are affected by this new legislation, how employer-employee non-compete agreements are used in our state, and whether additional revisions of the law are warranted, unnecessary or would be supported.

In stakeholder discussions and negotiations, the concept for a balanced and fair research study became obvious. In order to conduct this research, the Salt Lake Chamber worked with the Utah Legislature, the Labor and Employment Section of the Utah State Bar, industry associations, and chambers across the state for a comprehensive, fair, and impartial study of employer and employee perspectives on this issue. This study, conducted by Cicero, has sought to identify what the key issues concerning non-compete agreements are to better inform policymakers and business leaders.

We believe this is an unprecedented approach that no state has undertaken and speaks to the great partnership between the Legislature and business community. We want to commend all of the stakeholders involved in this process for their efforts and support to shed light on this complex issue.

The survey was conducted over several months with 2,000 employees and 937 employers responding. Employees from a broad variety of private companies (both large, medium and small in size) were eligible. Employers of diverse industries and sizes were also eligible. Focus groups were also conducted by the Cicero group as were interviews of potential investment firms. The full methodology is set forth in the survey results.

Below are the key results of that research, description of the methodology, crosstabs and other materials. We want to commend all of the stakeholders involved in this process for their efforts and support to shed light on this complex issue.

Key Developments:

Good information should drive good policy decisions. All stakeholders have been very committed to the research first process. They have supported this unprecedented effort at collecting Utah specific information that will then drive their policy decisions.

The results of the study demonstrate that last year’s bill is working, addresses concerns from both sides of the issue, and creates a balance between protecting the interests of both employees and employers.

Due to this and our collaborative process, there has been agreement for no further legislation regarding non-compete agreements during this legislative session.

Representative Schultz issued a full statement to his colleagues in the House and Senate late last night regarding the survey results and to share this decision to not proceed with further legislation this session. To view the statement: CLICK HERE.

We applaud the statesmanship of Representative Schultz, Representative Hawkes, Speaker Hughes, Senator Adams and our business leaders to come to this agreement. We urge you to share our appreciation for their leadership.

We will also continue work in good faith efforts with the working group and other stakeholders, to utilize this research and take the sufficient time outside the legislative session to consider further legislation that further enhances the balance between protecting the interests of both employees and employers.

Digesting and understanding the research results will be a large task given the comprehensive and unique nature of the survey itself. While there is academic research and writing on this topic, this type of specific employee/employer responses seems unique and provides a needed perspective. It is certainly full of important information for Utah legislators and the business community to absorb and consider.