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Lawmakers have decided not to pursue bills to limit "noncompete" clauses in contracts, which ban employees from working for competitors after they leave jobs.
That was one of the hottest issues in the Legislature last year.
But Reps. Mike Schultz, R-Hooper, and Timothy Hawkes, R-Centerville — who were considering legislation on the issue this year — issued a statement over the weekend, saying they will not introduce any, and instead will continue to work on "the optimal solution for Utah's long-term economic health."
Their decision follows the release Friday of a study about noncompete clauses ordered by the Legislature last year.
Its findings included that 18 percent of employees in the state have signed noncompete clauses with their current employers, and 40 percent of employers say they seek such clauses with at least some of their workers.
It said noncompete clauses are used in virtually every industry. It found that employers estimate that 11 percent of workers violate such clauses, and 37 percent of employers have never had a need to enforce the contracts.
The House had already defeated one noncompete clause bill this year, HB83 by Rep. Brian Greene, R-Pleasant Grove. It would have banned enforcing them if the employer did not give extra compensation for the clause, and if the employee were terminated without cause within one year of being hired.
Greene charged that some Utah companies use such clauses to allow them to lay off workers in slow times and ensure they are still available to be rehired when business picks back up.
Battles last year over such provisions were mostly won by big businesses who defended them. But some high-tech companies tried to eliminate them, saying that they make it hard to attract needed talent to the state, and that restrictions sometimes unfairly force fired workers out of their chosen careers.
Last year, a bill seeking to ban noncompete clauses was turned on its head by business lobbying, and it ended up instead making clear that the clauses are allowed, albeit with restrictions. That included limiting to one year the period that such clauses could bar an employee from working for a competitor after leaving a job. Also, if an employer tries to enforce a noncompete clause but loses the legal action, he or she could be held liable for the court costs.