Noncompete bill is catching heat
Sen. Ed Mayne, D-West Valley, told the Business and Labor Interim Committee on Wednesday that legislation is needed to ensure that employees in "common calling" jobs — those without "skills or talents that are special, unique or extraordinary" — can find employment in their industry once they leave or are laid off by an employer.
Mayne said a draft bill, based on a bill proposed during the general session earlier this year, is being formulated.
As currently written, the bill would make unenforceable any noncompetition contract prohibiting the former employee from working for a competitor outside the geographic area where the employee previously worked.
Contracts also would not be able to be enforced if the noncompetition provision lasts more than a year after the employee no longer works for the first company; if the employee is a common-calling worker or possesses no unique skills; or if the employment is terminated by the first company without just cause.
Mayne emphasized that people with unique skills and talents should be subject to such contracts. "But what we want to do is take a hard look at what we call common calling, where there are a large pool of employees that shouldn't be put into noncompetition agreements," he said.
The contracts make sense for people who are vice presidents of sales or vice presidents of marketing, she said.
"What we're seeing now is employees involved in what the courts have called common calling are being restricted in being able to provide for their families because they have signed these noncompetes, and they are terrified to go to work in the only field that they know because they're afraid that their employer is going to see them, so they just don't do it. So they're out of work or they're working for less money than they would be able to make if they were actually working within their skill set."
However, Sen. Michael Waddoups, R-Taylorsville, said some fields, especially technical ones, probably need a noncompetition period of longer than a year. "I don't think saying that 'one year in all cases' would allow a person variation in some of those highly technical fields," he said.
Scholnick said the Uniform Trade Secret Act protects trade secrets from being divulged to competitors, and nonsolicitation contracts can be written to ensure a former employee is prohibited from calling on his former company's clientele for a certain period.
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