As most are probably aware, federal law establishes most of the basic requirements of employment law in the United States. States (and even local governments) can then choose to embellish the law in favor of employees beyond the federal standards. In regards to the Utah Legislature, for many years I could confidently say, “compared to many other states, Utah is pretty hands off when it comes to creating employment-related legislation.”
There are some early signs, however, that this may be changing—at least to a degree. No, I am not saying we’re going to catch up with the California Assembly any time soon (please, no!), but it’s fair to say that the Utah Legislature is warming up to the idea. Now, I am not necessarily saying change is always a bad thing (despite being an employer-side attorney, I am certainly not opposed to any and every bill that might benefit employees). I do think it is important, however, for Utah employers to realize that their normally conservative legislature is getting more comfortable with the idea of creating pro-employee legislation. If they are not careful, their laid back, non-involved attitude of “there is no way that crazy bill could ever pass,” well,… may result in some unpleasant surprises sometime down the road. With this in mind, let’s take a quick look at what happened in the 2016 session.
Restrictions on Non-Compete Agreements
The biggest employment-law related story of the 2016 session has to be the passage of HB 251 placing restrictions on non-compete agreements. After working through many versions (including the initial version which included an outright ban on non-competes), the bill was scaled down considerably but still has some impact. The bill puts in place the following (click here to read full text: http://le.utah.gov/~2016/bills/hbillenr/HB0251.pdf):
- Restrictive covenants that last for more than one year from end of employment are prohibited (effective for agreements entered into on or after May 10, 2016).
- Employers who seek to enforce a non-compete through arbitration or civil action and lose, are liable for the employee’s arbitration or court costs, as well as actual damages.
- Exceptions apply for situations involving the sale of a business or severance agreements. This bill also does not apply to non-solicitation and non-disclosure agreements.
While many may be surprised that a conservative, pro-business legislature like Utah’s could pass a bill placing any type of limit on non-compete agreements, the love/hate nature of such agreements likely aided passage (while many businesses love to have non-competes on their employees, many executives who run these businesses hate having them applied to themselves personally). Could the bill have resonated with many of the legislators as a result of their own personal experiences?
Frankly, the passage of this bill may also be the consequence of some employers over-reaching with their non-compete agreements throughout the years (both in length/scope, and the types of employees applied to), resulting in too many stories circulating in the community about unconscionable restrictions. While in some ways the passage of this ultimately watered down bill simply codifies existing case law, the requirement that a losing employer pay the employee’s arbitration/court costs as well as actual damages, clearly raises the stakes in this age-old “game of chicken.” Perhaps most importantly, after the bill passed, Mike Schultz (R-Hooper), the bill’s chief sponsor, told the Deseret News that, “this isn’t over.” It’s probably fair to say proponents of the bill hope to wring some of the water out of it in future legislative sessions. Stay tuned!
SB 59 was passed which amends the Utah Antidiscrimination Act to prohibit discrimination based upon “pregnancy, childbirth, breastfeeding, or related conditions” (click here to read the full text—starting about line 353: http://le.utah.gov/~2016/bills/static/SB0059.html). Included in this is a requirement for employers to provide reasonable accommodations for these conditions when requested by the employee unless an undue hardship is created.
Obviously, legal protections for pregnant employees aren’t new. Federal law has prohibited discrimination on the basis of pregnancy since 1978. But the deliberate listing of “childbirth, breastfeeding, or related conditions,” is clearly meant to expand upon existing federal protections. It will take some time for us to learn how these new protections will be interpreted, but the clear intent of the amendment is to increase protections for women regarding a wider-range of pregnancy and maternity-related issues. Many employers have already discovered that providing a wide range of pregnancy/maternity-related accommodations to their female employees is a great way to develop good will and loyalty. Employers slow on the take may now learn the hard way if they fail to be sensitive to the needs of their female employees.
This new bill also requires publicizing these new accommodation rights in either employee handbooks or workplace posters (hmmm… something tells me your going to get bombarded with junk mail from all of those workplace poster companies telling you that your current posters are obsolete and that you must buy all new posters… lucky you!) It is worth noting that this is the second year in a row that the Legislature has added additional protected classes to the Utah Antidiscrimination Act.
Federal HB 116, which passed, is a reaction to a recent ruling from a federal agency broadly expanding the definition of “joint employers” (the purpose is to try and make larger, often “behind the scenes” entities share liability for the employees of smaller associated organizations—e.g., franchisors viewed as joint employers of their franchisees’ employees, etc.) The bill prohibits the State of Utah from using the new federal definition of joint employers (with some limitations). This bill shows that the Legislature can still be relied upon to pass pro-employer legislation (which I don’t think was ever in question). The text of the bill can be viewed here: http://le.utah.gov/~2016/bills/static/HB0116.html
Employee computer abuse
HB 241 (read it here: http://le.utah.gov/~2016/bills/static/HB0241.html) is another pro-employer bill that allows businesses to sue individuals (including current and former employees) who damage or access information without authorization on a “protected computer.”
So, it was a relatively impactful session for employers this year. As representatives of the employer community, I encourage you to share your thoughts with your elected representatives regarding employment-related matters which are important to you.
This article should not be construed as legal advice. Copyright © 2016 by Jonathan K. Driggs, Attorney at Law, P.C. All rights reserved.