Bill Summary – FastDemocracy

LEGISLATIVE GENERAL COUNSEL                                           H.B. 178
Approved for Filing: E.A. Evans 6                            2nd Sub. (Gray)
          6 02-03-23 4:54 PM 6
                  Representative Anthony E. Loubet proposes the following substitute bill:
                 POST-EMPLOYMENT RESTRICTIONS REVISIONS
                                       2023 GENERAL SESSION
                                           STATE OF UTAH
                              Chief Sponsor: Anthony E. Loubet
                              Senate Sponsor: Michael K. McKell
 6
 LONG TITLE
 General Description:
        This bill amends the Post-employment Restrictions Act.
 Highlighted Provisions:
        This bill:
        < defines terms;
        < prohibits certain agreements between a disability service provider and an employee
 or independent contractor that impact the employee's or independent contractor's
 ability to provide certain disability services after employment with the disability
 service provider ends; and
        < makes technical and conforming changes.
 Money Appropriated in this Bill:
        None
 Other Special Clauses:                                                                        2nd Sub. H.B. 178
        None
 Utah Code Sections Affected:
 AMENDS:
        34-51-102, as last amended by Laws of Utah 2018, Chapter 465
        34-51-201, as last amended by Laws of Utah 2019, Chapter 132
     *HB0178S02*
       2nd Sub. (Gray) H.B. 178                                                     02-03-23 4:54 PM
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 Be it enacted by the Legislature of the state of Utah:
        Section 1. Section 34-51-102 is amended to read:
        34-51-102. Definitions.
        As used in this chapter:
        (1) "Broadcasting employee" means an employee of a broadcasting company.
        (2) "Broadcasting company" means a person engaged in the business of:
        (a) distributing or transmitting electronic or electromagnetic signals to the general
 public using one or more of the following:
        (i) television;
        (ii) cable; or
        (iii) radio; or
        (b) preparing, developing, or creating one or more programs or messages for
 distribution or transmission by means described in Subsection (2)(a).
        (3) (a) "Disability" means a mental condition that materially limits an individual's
 activities or functioning.
        (b) "Disability" includes autism spectrum disorder.
        (4) "Exempt broadcasting employee" means a broadcasting employee who is
 compensated on a salary basis, as defined in 29 C.F.R. Sec. 541.602, at a rate equal to or
 greater than the greater of:
        (a) $913 per week, or an equivalent amount if calculated for a period longer than one
 week; or
        (b) the rate at which an employee qualifies as exempt under the Fair Labor Standards
 Act, 29 U.S.C. Sec. 213(a) on a salary basis as defined in 29 C.F.R. Part 541.
        (5) "Home and community-based service provider" means a person who provides
 support, supervision, or assistance to an individual with a disability in a residential setting,
 private home, or in the community.
        (6) "Independent contractor restrictive covenant" means an agreement, written or oral,
 between an employer and an independent contractor under which the independent contractor
 agrees that the independent contractor, either alone or as an employee or independent
 contractor of another person, will not compete with the employer in providing products,
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       02-03-23 4:54 PM                                                  2nd Sub. (Gray) H.B. 178
 processes, or services that are similar to the employer's products, processes, or services.
         [(4)] (7) (a) "Post-employment restrictive covenant," also known as a "covenant not to
 compete" or "noncompete agreement," means an agreement, written or oral, between an
 employer and employee under which the employee agrees that the employee, either alone or as
 an employee of another person, will not compete with the employer in providing products,
 processes, or services that are similar to the employer's products, processes, or services.
         (b) "Post-employment restrictive covenant" does not include nonsolicitation
 agreements or nondisclosure or confidentiality agreements.
         [(5)]
         (8) "Sale of a business" means a transfer of the ownership by sale, acquisition, merger,
 or other method of the tangible or intangible assets of a business entity, or a division or
 segment of the business entity.
         Section 2. Section 34-51-201 is amended to read:
         34-51-201. Post-employment restrictive covenants -- Home and community-based
 service provider restrictions.
         (1) (a) Except as provided in [Subsection (2)] Subsections (2) and (3) and in addition
 to any requirements imposed under common law, for a post-employment restrictive covenant
 entered into on or after May 10, 2016, an employer and an employee may not enter into a
 post-employment restrictive covenant for a period of more than one year [from] after the day
 on which the employee is no longer employed by the employer.
         (b) A post-employment restrictive covenant that violates this [subsection] Subsection
 (1) is void.
         (2) (a) Subject to Subsection (2)(b), a post-employment restrictive covenant between a
 broadcasting company and a broadcasting employee is valid only if:
         (i) the broadcasting employee is an exempt broadcasting employee;
         (ii) the post-employment restrictive covenant is part of a written employment contract
 of reasonable duration, based on industry standards, the position, the broadcasting employee's
 experience, geography, and the parties' unique circumstances; and
         (iii) (A) the broadcasting company terminates the broadcasting employee for cause; or
         (B) the broadcasting employee breaches the employment contract in a manner that
 results in the broadcasting employee no longer being employed by the broadcasting company.
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        2nd Sub. (Gray) H.B. 178                                                 02-03-23 4:54 PM
        (b) A post-employment restrictive covenant described in Subsection (2)(a) is
 enforceable for no longer than the earlier of:
        (i) one year after the day on which the broadcasting employee is no longer employed by
 the broadcasting company; or
        (ii) the day on which the original term of the employment contract containing the
 post-employment restrictive covenant ends.
        (c) A post-employment restrictive covenant between a broadcasting company and a
 broadcasting employee that does not comply with this [subsection] Subsection (2) is void.
        (3) (a) A post-employment restrictive covenant or independent contractor restrictive
 covenant between a home and community-based service provider and an employee or
 independent contractor of the home and community-based service provider is void.
        (b) A home and community-based service provider may not enter into an agreement
 with an employee or independent contractor that limits the right of an individual with a
 disability to choose to receive services from the employee or independent contractor after the
 day on which the employee or independent contractor ceases to be employed by the home and
 community-based service provider.
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Statutes affected: 
Introduced: 34-51-102, 34-51-201
H.B. 178 1st Substitute (Not Adopted) Text: 34-51-102, 34-51-201