Non-compete agreements are enforceable in Utah, but only inside a narrow set of limits. The Post-Employment Restrictions Act caps any non-compete at one year, courts add their own reasonableness tests on top, and starting May 6, 2026, new non-competes with most licensed healthcare workers are banned outright. If an agreement misses on any of those fronts, the usual outcome in Utah is that the whole thing falls, not that a court trims it to something workable.
The One-Year Cap
For any non-compete signed on or after May 10, 2016, an employer and employee cannot agree to a post-employment restriction lasting more than one year after employment ends.1Utah Legislature. Utah Code 34-51-201 – Post-Employment Restrictive Covenants Go past that line and the whole covenant is void. There is no partial credit, no “well, the first twelve months still count.” The agreement dies.
The clock runs from your last day on the job, not from the day you signed. If you signed a non-compete at hiring and worked there five more years, the one-year restriction begins when you walk out, not when you signed.
What the Cap Does Not Cover
The statute defines a “post-employment restrictive covenant” as an agreement not to compete with the employer in similar products or services.2Utah Legislature. Utah Code 34-51-102 – Definitions That definition carves out non-solicitation agreements, nondisclosure agreements, and confidentiality agreements. So a two-year clause barring you from contacting your old employer’s clients, with no bar on working for a competitor, is not controlled by the one-year cap. It’s a non-solicit, and the statute doesn’t touch it.
Two other situations sit outside the cap. A reasonable severance agreement negotiated at or after termination can include a non-compete longer than a year if both sides agree in good faith.3Utah Legislature. Utah Code Chapter 51 – Post-Employment Restrictions Act And non-competes tied to the sale of a business are exempt, as long as the person restricted gets value from the sale. Someone who just sold their company is in a different posture than a departing employee.
The Common Law Tests
Clearing the one-year cap is necessary but not enough. The statute says its limits apply “in addition to any requirements imposed under common law,” and Utah courts construe non-competes against the employer trying to enforce them.1Utah Legislature. Utah Code 34-51-201 – Post-Employment Restrictive Covenants Ambiguity cuts the employer’s way, not yours.
A Legitimate Business Interest
An employer has to show the non-compete protects a real interest, not just a generalized wish to keep you from competing. Utah courts have recognized three that qualify: confidential information, customer goodwill, and a substantial investment in training the employee. Without one of those, the agreement loses even if it’s otherwise clean.
Consideration
A non-compete needs consideration like any contract. If you sign at the start of a new job, the job itself is enough. Utah is friendly to employers on this with existing workers too: handing an at-will employee a non-compete years into the job is backed by the promise of continued employment, which the Utah Supreme Court held sufficient in System Concepts, Inc. v. Dixon (1983). That rule still stands.
Reasonable Scope
Three dimensions have to be reasonable:
- Geography. The restricted area should match where the employer actually does business or markets its services. A Salt Lake consulting firm can’t block you from working in Miami if it has nothing in Miami.
- Duration. Even inside the one-year ceiling, a court can decide a shorter period fits the situation better.
- Activity. The prohibited work has to track what the employer actually does. “Any business activity” is almost certainly too broad. A clause tied to selling the same type of product to the same customer segment has a real chance.
Healthcare Workers: Flat Ban Starting May 6, 2026
Utah passed HB270 in the 2026 legislative session. Starting May 6, 2026, employers and healthcare workers cannot enter into new non-compete agreements at all.4Utah Legislature. HB 270 Healthcare Worker Post-Employment Amendments This is a prohibition, not a shorter time limit.
“Healthcare worker” is defined broadly, covering more than 30 licensed professions including physicians, dentists, registered nurses, nurse practitioners, physical therapists, psychologists, clinical social workers, mental health counselors, and optometrists, among others.4Utah Legislature. HB 270 Healthcare Worker Post-Employment Amendments If you hold a Utah license in a clinical healthcare field, you are almost certainly covered.
Two limits are worth knowing. The ban applies only to agreements entered into on or after May 6, 2026. It does not retroactively erase existing contracts. A non-compete signed before that date can still be enforced under the old framework, meaning the one-year cap and the common law tests.
Broadcasting Employees
Non-competes between a broadcasting company and a broadcasting employee are valid only if three conditions are met: the employee is an exempt broadcasting employee earning at or above the salary threshold tied to the Fair Labor Standards Act exemption, the covenant is part of a written employment contract of reasonable duration, and either the employer terminated the employee for cause or the employee’s breach ended the employment. The duration is capped at the shorter of one year after departure or the day the original contract term expires.1Utah Legislature. Utah Code 34-51-201 – Post-Employment Restrictive Covenants Fail any condition and the covenant is void. A news anchor laid off without cause can’t be held to a non-compete, even if one sits in the contract.
If Your Employer Sues on an Invalid Non-Compete
This is where Utah’s statute has teeth. If an employer takes a former employee to court or to arbitration over a non-compete and the agreement turns out to be unenforceable, the employer owes the employee’s attorney fees, court costs, arbitration costs, and actual damages.5Utah Legislature. Utah Code 34-51-301 – Award of Arbitration Costs, Attorney Fees and Court Costs, and Damages That changes the math for employers. Chasing a weak non-compete isn’t just wasted effort; it carries a real bill. If you’re a former employee staring down a demand letter, knowing about this provision changes the conversation.
Utah Courts Do Not Rewrite Overbroad Non-Competes
Some states let courts take an overbroad non-compete, strike the unreasonable parts, and enforce the rest. That approach is sometimes called the blue pencil doctrine. Utah’s statute doesn’t address it, and no reported Utah case has applied blue penciling or similar judicial modification to a non-compete. The practical effect: employers can’t count on a court to rescue a sloppy agreement by trimming it down. If the covenant reaches too far, the likely outcome is that the whole thing is thrown out, with the employer paying the former employee’s legal costs on top. Boilerplate pulled from other states is a real risk here, because there is no safety net.