Bill restricting noncompete contracts for TV journalists is one House vote away from the governor’s desk

(Francisco Kjolseth | The Salt Lake Tribune) TV cameras swarm Rep. Angela Romero, D-Salt Lake City, Wednesday for a debate over ending the death penalty. House members noted the absence of cameras when lawmakers took up discussion of a noncompete bill that is opposed by Utah's four main television stations.

Utah newscasters, it appears, will get a gift from the Legislature in the form of a ban on some noncompete clauses that can prevent a broadcast journalist from working for a year after being let go.

HB241 cleared the Senate on Tuesday on a 16-12 vote and the House agreed Wednesday to technical amendments. It now goes to the govenor.

Key lawmakers such as House Speaker Greg Hughes said they had had been flooded with private communications from TV journalists supporting the measure, many of them claiming they had been instructed not to openly speak in favor or to provide news coverage of the legislation.

HB241-sponsoring Rep. Mike Schultz, R-Hooper, earlier said noncompete “abuses” within the industry were widespread.

Marc Sternfield, news director at Fox 13, said reporters at his station were free to speak their minds. He said the issue wasn’t getting much coverage because it didn’t affect a lot of Utahns.

Feb. 22: Contending Utah TV stations abuse employee contracts, House passes ‘noncompete’ bill

Rep. Timothy Hawkes, R-Centerville, asked colleagues to look up at the press galleries in the Utah House chamber — and notice how no TV cameras or TV reporters were present to cover a big bill affecting their industry and perhaps the quality of their reporting.

House Speaker Greg Hughes said TV reporters earlier told him that their stations — which oppose HB241 — ordered them not to cover the bill. He said at least 65 reporters, producers and technicians told him they favor it to give them more power against their bosses, but said they likely would be fired if they spoke out publicly.

Amid that, the House voted 62-12 on Wednesday to pass the bill that would limit noncompete clauses in TV contracts that now often prevent employees from working for another competing station for a year after they leave their job.

It now goes to the Senate, where President Wayne Niederhauser, R-Sandy, said senators are being lobbied from both sides.

The amended bill would ban noncompete clauses entirely for television workers who earn less than $47,500 a year. For others, noncompete clauses would be limited to the term of contracts. For example, reporters who have a three-year contract could switch stations immediately at the end of it — giving them more negotiating power.

Rep. Mike Schultz, R-Hooper, sponsor of the bill, said that after talking privately with many TV station employees in Utah, “the abuses inside the broadcasting industry with these noncompetes are widespread.”

He said other industries sometimes use noncompete clauses to help protect trade secrets, but journalists have few of those. “The reason they are being asked to sign noncompete agreements is so those companies can lock up that talent” and prevent employees from going to competitors or trying to gain raises.

Rep. Merrill Nelson, R-Grantsville, argued that practice is a reasonable protection for TV stations. He is an attorney for Kirton McConkie, the law firm for the LDS Church — which owns KSL.

That station — as Salt Lake Tribune columnist Robert Gehrke reported earlier — has invited groups of legislators to the church’s Joseph Smith Building for filet mignon lunches to listen as a former church general authority argued the bill would hurt stations that invest in employees to build up their popularity and skill.

“Some of their key employees represent as a name and a face … the entity itself. They represent the goodwill, they represent the product — which is credibility, trust, good reputation,” Nelson said.

“If these employees, after years of identifying themselves with a particular broadcast, are free to walk away at any time, that destroys the goodwill, the reputation, the trust these employers have built up,” he said.

Nelson said it is unfair for the state to interfere with contracts voluntarily agreed to by both parties. And he argued that it is unfair to target just the broadcast industry, and any such law should affect all businesses in the state — or none at all.

But Hawkes argued the state has a compelling interest to ban noncompetes at TV stations because it may affect the quality of local news, and therefore freedom of speech.

“Noncompetes are silencing media voices” by forcing some journalists out of the industry or state — and making many fear for their jobs if they publicly support the bill, he said. “The media is uniquely positioned to be a voice of trust.”

That is when Hawkes pointed to the lack of TV cameras covering debate on the bill. “There are no cameras here. So tell me, colleagues, how that is not a First Amendment problem? … We’ve had newspapers report on it, but we haven’t seen anything on TV.”

Schultz also suggested that Deseret News coverage — and editorializing against the bill — may have been slanted because that newspaper is owned by the LDS Church, as is KSL.

He urged members to compare coverage of the bill by the paper “whose parent company … uses noncompete agreements extensively, and compare that to the other one that does not have noncompete agreements.”

The Salt Lake Tribune called some TV stations for comment.

Marc Sternfield, news director at Fox 13, responded by email, saying, “The First Amendment is our business. Fox 13 respects the right of our employees, as constituents, to voice their opinions on HB241. While journalists are not supposed to take political positions, we acknowledge this is a unique situation involving a matter directly impacting our industry and our staff.”

He added, “In our many editorial meetings since HB241 was introduced, not a single reporter has proposed covering this legislation as a news story, although it has been discussed. The view of management and the consensus of our staff is that HB241 only affects several hundred people in Utah, at most, and has no broader impact on the community.”

Feb. 20: House Speaker Hughes says Utah TV stations silence news employees on controversial ‘noncompete’ bill

House Speaker Greg Hughes was incensed as he waved emails and notes from 65 people who say their employers would fire them if they testified to the Legislature, calling it an affront to freedom of speech.

Ironically, he aimed that criticism at Salt Lake City’s four main television news operations for how they treat reporters, producers and technicians.

At an earlier hearing, leaders of the TV stations opposed HB241, which would eliminate noncompete clauses in many contracts that prevent employees from working for another competing TV station for a year after they leave their job. A few employees also supported them.

LDS Church-owned KSL — as Salt Lake Tribune columnist Robert Gehrke reported earlier — also invited groups of lawmakers to the Joseph Smith Building for filet mignon lunches to listen as a former church general authority argued the bill would hurt stations that invest in employees to build up their popularity and skill.

But Hughes told the House GOP Caucus on Tuesday that most reporters’ viewpoints have not been heard openly because they fear they will be fired if they speak on the record — and said stations have ordered them not to cover the bill. He said they have shared their stories with him privately.

“These individuals are afraid because they can’t speak because they would be terminated,” he said.

“This issue has been brought up in newsrooms,” where he said owners and managers gave instructions not “to cover the story.”

Hughes added that when reporters — charged with reporting truth to the public — are unable to share their views in a public hearing process, “We’ve got a problem. That isn’t freedom of the press. It isn’t even freedom of speech.”

Hughes said he’s also heard from former TV reporters who wanted to stay in Utah but were barred from working for other stations when they were terminated. So they were forced out of journalism or out of the state.

“I don’t think that strengthens the bench or the talent pool for broadcasters,” Hughes said, adding that it weakens owners’ arguments that banning the noncompete clauses would weaken their operations and hurt freedom of the press.

He adds that newspapers do not use noncompete clauses, and it does not hurt them nor their ability to keep talented reporters.

Hughes provided some copies of the letters from TV employees, with the names redacted, to the Tribune.

One producer — who was paid $15 an hour — wrote that he previously did not have a noncompete clause. But his station pushed him to sign one as he sought a raise, and warned that he may lose his job if he did not agree to it.

He noted the contract allowed him to be terminated for any reason, and would not allow him to work for any competitor.

Another news anchor, whose name was also redacted, reported giving two weeks’ notice to quit because of poor treatment of employees. The anchor said the station threatened to sabotage work with any other employer. The anchor was able to buy out the remaining time on the contract, but the noncompete clause prevented moving to any competitor in the state for a year.

Rep. Mike Schultz, R-Hooper, sponsor of the bill, told the caucus that he has not seen any industry abuse noncompete clauses as much as broadcast media — saying it does not use them to protect trade secrets but to try to remove the ability for employees to leave or negotiate better deals.

He said he is changing his bill to improve chances of its passage.

It would still allow noncompete clauses, but only for the length of current contracts. For example, if an employee has a three-year contract, the noncompete clause would be in effect only to the end of that period — allowing the employee to work for a competitor immediately afterward. That may increase their negotiating power.

Also, he said changes would ban noncompete contracts for employees who earn less than $47,000 a year.

When lawmakers asked if television stations had agreed to the changes, Schultz said they told him they are not interested in negotiating changes — and simply oppose the bill.

Rep. Timothy Hawkes, R-Centerville, also told the caucus, “You cannot shut down media voices and tell us that is necessary to protect freedom of speech. … Media voices are being silenced.”