Utah Non-Compete Laws (2026): Are Non-Competes Enforceable?

Utah allows employee non-competes but limits them. Under Utah Code 34-51-201, part of the Post-employment Restrictions Act, a non-compete entered into on or after May 10, 2016 may not last more than one year after the job ends, and one that does is void. A covenant within that limit must still pass the common-law reasonableness test set out by the Utah Supreme Court in System Concepts, Inc. v. Dixon (1983).

Two 2026 laws added hard limits for particular workers: since May 6, 2026, non-competes with licensed healthcare workers and with most veterinarians are void. For how other states compare, see our non-compete laws by state guide.

Information last verified on 2026-10-08. This article has not been reviewed by a licensed lawyer.

Jurisdiction scope: This article covers Utah law on employee non-compete agreements under the Post-employment Restrictions Act, Utah Code Title 34, Chapter 51 (as amended in 2026), and the Utah Supreme Court decisions applying the common-law test, with a short note on the federal FTC rule. It does not cover trade-secret claims (see Utah trade secret laws) or severance pay (see Utah severance pay laws).

Are non-competes enforceable in Utah?

Yes, for most workers, if the non-compete is reasonable and lasts no more than one year after employment ends. The statute does not replace the common law; it applies "in addition to any requirements imposed under common law." So a Utah non-compete has to clear two hurdles: the statutory limits and the court-made test.

The one-year limit (Utah Code 34-51-201)

The cap reads:

"for a non-compete agreement entered into on or after May 10, 2016, an employer and an employee may not enter into a non-compete agreement for a period of more than one year from the day on which the employee is no longer employed by the employer." Utah Code 34-51-201(1)(a)

The consequence of going over is stated plainly: "A non-compete agreement that violates this Subsection (1) is void." The statute contains no language letting a court shorten an overlong covenant to one year.

The clock starts the day you are no longer employed by that employer. The statute sets no geographic cap, no advance-notice requirement, no right to consult a lawyer before signing and no garden-leave pay. Our research read every section of chapter 34-51 and found none of those.

What counts as a non-compete. Utah Code 34-51-102(8) defines it as an agreement, "written or oral," under which the employee agrees that after the job ends, alone or as someone else's employee, the employee "will not compete with the employer in providing a product, process, or service that is similar to the employer's." The definition expressly excludes non-solicitation agreements, nondisclosure agreements and confidentiality agreements.

The common-law test

Utah courts apply a four-part test. In System Concepts, Inc. v. Dixon, 669 P.2d 421 (Utah 1983), the Utah Supreme Court stated the requirements, which it traced to its earlier decision in Allen v. Rose Park Pharmacy:

"These requirements are that: (1) the covenant be supported by consideration; (2) no bad faith be shown in the negotiation of the contract; (3) the covenant be necessary to protect the goodwill of the business; and (4) it be reasonable in its restrictions as to time and area." System Concepts, Inc. v. Dixon, 669 P.2d 421 (Utah 1983)

The goodwill requirement does real work. In Robbins v. Finlay, 645 P.2d 623 (Utah 1982), the court held a hearing-aid salesman's covenant unreasonable and unenforceable. There was no showing he had created the employer's goodwill, knew its trade secrets or provided special services. As the court put it: "Covenants not to compete which are primarily designed to limit competition or restrain the right to engage in a common calling are not enforceable."

Consideration and signing after you start

System Concepts upheld a covenant where the consideration was continued at-will employment. That ruling rested on its facts, as the trial court found them: the employee had the agreement for about two months and received a raise and a promotion in between. Treat it as one example, not a rule that any mid-job covenant is automatically supported. A Utah lawyer can assess a specific signing situation.

What a court does with an overbroad covenant

A covenant longer than one year is void under the statute. Beyond that, our research did not establish from a Utah opinion whether Utah courts will rewrite, or "blue pencil," a covenant that is unreasonable in some other way, so that question is open.

What System Concepts did do is read a covenant that named no geographic area as impliedly limited to the employer's market, and enforce it on that reading. That is interpretation of the contract's terms, not the court rewriting them.

Healthcare workers (from May 6, 2026)

On or after May 6, 2026, a person and a healthcare worker "may not enter into" a healthcare non-compete agreement, and one that violates the rule is void (Utah Code 34-51-201(1)(b), (c)). The ban applies to agreements entered into on or after that date; an earlier healthcare non-compete is judged under the one-year cap and the common-law test.

Who is covered. A "healthcare worker" is an individual who is both licensed and practicing in one of 33 license types listed in Utah Code 34-51-102(5)(a). The list includes advanced practice registered nurses, registered nurses, licensed practical nurses, physicians, physician assistants, dentists, optometrists, psychologists, therapists, social workers and physical therapists. It excludes a licensee whose job does not require or involve practicing under the license.

What is banned. A "healthcare non-compete agreement" is an agreement not to provide a service within the scope of the worker's license for a restricted time or in a geographic area (Utah Code 34-51-102(4)).

Patient notice. A separate section bars, for agreements entered into on or after May 6, 2026, a non-solicitation agreement that stops a healthcare worker from telling a patient about "the healthcare worker's current place of employment" or "the healthcare worker's future place of employment." Such an agreement is void (Utah Code 34-51-203). Other non-solicitation terms with healthcare workers are not addressed by that section.

Veterinarians (from May 6, 2026)

Senate Bill 111 gave veterinarians their own rules for agreements entered into on or after May 6, 2026:

• a veterinarian non-compete is void, unless the veterinarian owns at least 5% of the business (Utah Code 34-51-201(3));
• a clause requiring a veterinarian non-compete to be litigated in another state is void and against public policy (Utah Code 34-51-201(4));
• a nondisclosure clause that bars a veterinarian from discussing work experience is void (Utah Code 34-51-205); and
• veterinarian non-solicitation agreements are void (Utah Code 34-51-206).

Broadcasters

Broadcasting non-competes are valid only in narrow circumstances (Utah Code 34-51-201(2)). All three conditions must be met: the worker is an "exempt broadcasting employee," the non-compete is part of a written employment contract of reasonable duration, and the company ends the job for cause or the employee breaches the contract in a way that ends the job. Even then, it runs no longer than the earlier of one year after employment ends or the end of the original contract term. Otherwise it is void.

An exempt broadcasting employee is one paid a salary at a rate at least the greater of "$913 per week" or the rate at which an employee qualifies as exempt under the federal Fair Labor Standards Act (Utah Code 34-51-102(3)). That is the only pay threshold in chapter 34-51.

Severance agreements and business sales

Utah Code 34-51-202 sets two exceptions:

• Severance. A non-compete or healthcare non-compete may be part of "a reasonable severance agreement mutually and freely agreed upon in good faith at or after the time of termination." It remains subject to the common-law requirements.
• Sale of a business. A non-compete or healthcare non-compete related to or arising out of the sale of a business is allowed if the individual receives value related to the sale.

These exceptions name non-compete and healthcare non-compete agreements only. Section 34-51-202 does not mention veterinarian non-compete agreements; the veterinarian rule has its own exception for a veterinarian with at least a 5% ownership interest.

For how severance works in Utah more broadly, see Utah severance pay laws.

Fired versus quit

Utah's general rule does not change based on whether you were fired, laid off or quit. The only statutory rule tied to how the job ended is the broadcasting provision, which requires a for-cause termination or the employee's breach. Our research found no Utah case addressing a firing without cause. For when an employer can end the job in the first place, see Utah at-will employment laws.

Who pays if an employer loses

Utah shifts costs to an employer that tries and fails to enforce a covenant. Under Utah Code 34-51-301, if an employer seeks to enforce a non-compete, healthcare non-compete, nondisclosure clause or non-solicitation agreement through arbitration or a civil action and it is determined to be unenforceable, "the employer is liable for the employee's: (1) costs associated with arbitration; (2) attorney fees and court costs; and (3) actual damages."

The 2016 version of the section applied to "post-employment restrictive covenants." The 2026 amendments rewrote it to name all four types of agreement.

No state agency enforces chapter 34-51. The remedy is in court or arbitration.

Non-solicits, NDAs and trade secrets

Because non-solicitation, nondisclosure and confidentiality agreements are excluded from the definition of a non-compete, the one-year cap does not govern them. They are still covered by the fee-shifting rule in 34-51-301, and specific healthcare and veterinarian versions are void, as described above.

Trade-secret law is separate. It protects specific confidential information whether or not you signed a covenant; see Utah trade secret laws.

Choice of law

Outside the veterinarian forum rule above, our research found no general Utah statute in chapter 34-51 that voids a clause choosing another state's law or courts for a non-compete.

Recent and pending changes

• H.B. 270, Healthcare Worker Post-employment Amendments (2026), enacted. Took effect May 6, 2026. It voids healthcare non-competes entered into on or after that date, voids non-solicits that block patient notice, extends the existing severance and sale-of-business exceptions to healthcare non-competes, and extends fee-shifting to healthcare non-competes. The code credits these changes to Chapter 341 of the 2026 General Session.
• S.B. 111, Veterinary Post-employment Amendments (2026), enacted. Took effect May 6, 2026, adding the veterinarian rules and Utah Code 34-51-205 and 34-51-206. It also extended the fee-shifting rule in 34-51-301 to nondisclosure clauses and non-solicitation agreements. The code credits them to Chapter 66 of the 2026 General Session.
• H.B. 203, Non-Compete Amendments (2026), did not become law. As introduced, it would have limited enforcement of non-competes in some situations and against independent contractors. None of it appears in the current code.

We did not find a 2025 Utah non-compete enactment, and 2027 prefiled bills were not checked.

The federal FTC rule

The FTC's nationwide non-compete rule never took effect. A federal court in Texas set it aside on August 20, 2024 (Ryan, LLC v. FTC, No. 3:24-CV-00986-E, N.D. Tex.), the FTC voted on September 5, 2025 to dismiss its appeals, and the rule was removed from the Code of Federal Regulations effective February 12, 2026. The FTC still acts case by case; on June 22, 2026 it approved a final order requiring a pest-control company to stop enforcing non-competes. See FTC non-compete ban struck down and the non-compete laws by state guide.

What this means if you signed one

In Utah the first questions are about dates and roles: when the agreement was signed, how long the restriction runs after the job ends, and whether you are a licensed healthcare worker, a veterinarian or a broadcaster. Then come the four common-law factors, especially whether the employer is protecting real goodwill rather than avoiding ordinary competition. A lawyer licensed in Utah can review a specific agreement.

Related

• Non-compete laws by state
• Utah trade secret laws
• Utah severance pay laws
• Utah at-will employment laws
• FTC non-compete ban struck down

Disclaimer: This article provides general legal information about Utah non-compete law, including the Post-employment Restrictions Act (Utah Code 34-51-102 to 34-51-301) and the Utah Supreme Court decisions applying the common-law test, not legal advice. The information was last verified on 2026-10-08. Utah non-compete disputes are decided in court or arbitration; for advice about a specific agreement, contact a legal aid office or a lawyer licensed in Utah.

Last updated: 2026-10-08.

Frequently Asked Questions

Are non-competes enforceable in Utah?

They can be. Utah Code 34-51-201 caps a non-compete at one year after the job ends, and courts also apply the four-part common-law test from System Concepts v. Dixon (1983); healthcare worker and most veterinarian non-competes entered into on or after May 6, 2026 are void.

How long can a non-compete last in Utah?

No more than one year from the day you stop working for the employer, for agreements entered into on or after May 10, 2016. A non-compete that violates the cap is void (Utah Code 34-51-201(1)).

Did Utah ban non-competes for nurses and doctors?

Yes, for agreements entered into on or after May 6, 2026. Utah Code 34-51-201 voids a healthcare non-compete with an individual who is licensed and practicing in one of the listed license types, which include registered nurses, physicians, physician assistants and dentists.

Is there a salary threshold for Utah non-competes?

Not for most workers. The only pay test in chapter 34-51 is for broadcasting employees: at least the greater of $913 per week or the federal FLSA exempt salary rate (Utah Code 34-51-102(3)).

Who pays legal fees if my employer sues over a Utah non-compete?

If the employer seeks to enforce a non-compete, non-solicit or nondisclosure clause in court or arbitration and it is determined unenforceable, Utah Code 34-51-301 makes the employer liable for your arbitration costs, attorney fees, court costs and actual damages.

Does the one-year limit apply to non-solicitation agreements in Utah?

No. Utah's definition of a non-compete agreement excludes non-solicitation, nondisclosure and confidentiality agreements (Utah Code 34-51-102(8)), though the fee-shifting rule in 34-51-301 now covers them.

Can a Utah severance agreement include a non-compete?

Utah Code 34-51-202 allows a non-compete in a reasonable severance agreement mutually and freely agreed upon in good faith at or after termination, still subject to the common-law requirements.

Does the FTC non-compete ban apply in Utah?

No. A federal court set the FTC rule aside on August 20, 2024, and it was removed from the Code of Federal Regulations effective February 12, 2026. Utah law governs.