Non-compete agreements are enforceable in Utah, but only inside tight limits. The state’s Post-Employment Restrictions Act caps them at one year, courts add common law tests on top of that, and a new law bans them entirely for most licensed healthcare workers starting May 6, 2026. An agreement that clears the one-year rule can still fail if it protects nothing legitimate or reaches too far.
The One-Year Cap
For any non-compete signed on or after May 10, 2016, Utah law forbids an employer and employee from agreeing to a restriction that lasts more than one year after employment ends.1Utah Legislature. Utah Code 34-51-201 – Post-Employment Restrictive Covenants Go over that line by a day and the whole covenant is void. There is no fallback where the first twelve months survive and the excess gets trimmed. The agreement dies.
The one-year clock starts on your last day of work, not the day you signed. If you signed on your first day and stayed five years, the restriction runs for one year after you leave.
What the Cap Does Not Cover
The statute defines a “post-employment restrictive covenant” narrowly: an agreement not to compete with the employer in similar products or services.2Utah Legislature. Utah Code 34-51-102 – Definitions Non-solicitation clauses, nondisclosure agreements, and confidentiality agreements are outside that definition. A two-year promise not to contact your old employer’s clients isn’t controlled by the one-year cap because it isn’t a non-compete.
Two other situations sit outside the cap. A reasonable severance agreement negotiated at or after termination can include a longer non-compete if both sides agree in good faith.3Utah Legislature. Utah Code Chapter 51 – Post-Employment Restrictions Act And a non-compete tied to the sale of a business is exempt, as long as the person restricted actually receives value from the sale.
The Common Law Tests
Coming in under one year is necessary but not sufficient. The statute says its limits apply “in addition to” the 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 Three requirements matter.
A Real Business Interest
The employer has to show the restriction protects a genuine interest, not simply a wish to shut down competition. Utah recognizes three: confidential information, customer goodwill, and a substantial investment in training. Without one of those, the non-compete fails no matter how carefully it was written.
Consideration
A non-compete needs consideration like any other contract. For a new hire, the job offer itself is enough. Utah is unusually employer-friendly for existing workers too: handing an at-will employee a non-compete years into the job is supported by the promise of continued employment, and that promise is treated as adequate consideration.
Reasonable Scope
The restrictions have to be reasonable across three dimensions:
- Geography. The restricted area should track where the employer actually does business or seeks its market. A Salt Lake City firm with no Miami clients cannot bar you from working in Miami.
- Duration. A court can find that a shorter period than one year is what the situation warrants.
- Activity. The prohibited work must be tied to what the employer actually does. Blocking “any business activity” is almost certainly too broad; blocking sales of the same software to the same customer segment reads much better.
Healthcare Workers: Banned Starting May 2026
Utah passed HB270 in the 2026 session. Beginning May 6, 2026, employers and healthcare workers cannot enter into new non-competes at all.4Utah Legislature. HB 270 Healthcare Worker Post-Employment Amendments Not a time limit. A flat ban.
The definition of “healthcare worker” covers more than 30 licensed professions, including physicians, dentists, registered nurses, nurse practitioners, physical therapists, psychologists, clinical social workers, mental health counselors, and optometrists.4Utah Legislature. HB 270 Healthcare Worker Post-Employment Amendments If you hold a Utah clinical license, you are almost certainly covered.
Two limits are worth knowing. The ban reaches only agreements entered into on or after May 6, 2026, and it does not void existing contracts. A non-compete signed before that date is still evaluated under the older rules, meaning the one-year cap and the common law tests.
Broadcasting Employees Have Their Own Rules
Non-competes between broadcasting companies and broadcasting employees are valid only if three conditions line up: the employee qualifies as an exempt broadcasting employee (a salary at or above the FLSA exemption threshold), the covenant sits inside a written employment contract of reasonable duration, and either the employer fired the employee for cause or the employee breached the contract in a way that ended it.1Utah Legislature. Utah Code 34-51-201 – Post-Employment Restrictive Covenants Duration is capped at the shorter of one year after departure or the day the original contract term ends. Miss any of those conditions and the covenant is void. A station that lays off an anchor without cause cannot enforce a non-compete against them.
What Happens if Your Employer Sues Anyway
This is where Utah tilts back toward employees. If an employer takes a former employee to court or arbitration on a non-compete and loses because the agreement is unenforceable, the employer pays 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 Fee shifting changes the math. A demand letter over a shaky non-compete is not free for the employer to send, and employees who know the rule have real leverage when one shows up.
Utah Courts Will Not Rewrite an Overbroad Agreement
Some states let courts strike the unreasonable parts of a non-compete and enforce the rest, sometimes called blue penciling. Utah’s statute does not address the practice, and no reported Utah case has applied it to a non-compete. The practical effect: if an agreement reaches too far on geography, activity, or duration, the likely outcome is that the whole thing falls, and the employer picks up the employee’s legal costs under the fee-shifting rule. Employers who paste in boilerplate from other states have no safety net here.
Is There a Federal Ban?
No. The FTC tried to ban non-competes nationwide in 2024, a federal court blocked the rule before it took effect, and by early 2026 the FTC withdrew its appeals and removed the rule from federal regulations. The agency can still challenge individual agreements it considers unfair, but for Utah workers and Utah employers, state law is what decides whether a non-compete holds up.