Are Non-Compete Agreements Enforceable in Utah in 2026?

Non-compete agreements just became a live issue again for Utah employers. If you're asking whether non-compete agreements are enforceable in Utah, the answer in 2026 is yes, but inside tighter limits than many employers assume: a one-year cap, fee-shifting penalties for overreach, and a brand new ban on non-competes with healthcare workers that took effect May 6, 2026.

The question comes up constantly in Utah County. Silicon Slopes companies in Lehi and Provo lean on non-competes to protect product knowledge and customer relationships, and medical, dental, and therapy practices across the county have used them for years to protect patient bases. This year the rules changed for one of those groups. Here's where Utah law stands and what's worth updating now.

Are Non-Compete Agreements Enforceable in Utah?

Yes, with limits. Utah enforces reasonable non-compete agreements for most employees, but the Post-Employment Restrictions Act caps them at one year after employment ends, and since May 6, 2026, non-competes with licensed healthcare workers are void.

Utah's statute sits in Title 34, Chapter 51 of the Utah Code, and it operates on top of the older common law rules. That means a Utah non-compete has to clear two bars. It has to comply with the statute, and it still has to be reasonable the way courts have always required: tied to a legitimate business interest such as trade secrets, confidential information, or customer goodwill, and no broader in geography and scope than that interest justifies. An agreement that fails either test doesn't get enforced.

What Does Utah's One-Year Limit Actually Require?

A non-compete entered into on or after May 10, 2016 can't restrict a former employee for more than one year after the day employment ends, and an agreement that tries is void (Utah Code § 34-51-201). Not trimmed down to one year. Void.

The statute defines a post-employment restrictive covenant as an agreement not to compete with the employer after the job ends, and it expressly excludes non-solicitation agreements and nondisclosure or confidentiality agreements (Utah Code § 34-51-102). That exclusion matters more than most employers realize, because it means the tools you'll usually want to rely on aren't subject to the one-year cap at all. There are also narrow special rules for broadcasting employees and an exception for covenants connected to the sale of a business, where longer restrictions remain possible (Utah Code § 34-51-202).

What Changed in 2026? The Healthcare Non-Compete Ban

As of May 6, 2026, a Utah employer may not enter into a non-compete agreement with a licensed healthcare worker. House Bill 270 amended the Post-Employment Restrictions Act to make those agreements void.

The ban covers workers licensed and practicing in roughly 33 healthcare professions, including physicians, nurses, dentists, pharmacists, therapists, and counselors. It applies prospectively, to agreements entered into on or after the effective date. The bill also enacted a new provision: a non-solicitation agreement can't stop a healthcare worker from telling patients where the worker currently practices or where the worker is going next (Utah Code § 34-51-203). A companion bill, SB 111, applies similar restrictions to veterinarians.

Two exceptions survive. A reasonable severance agreement, mutually agreed to in good faith at or after termination, can still include a non-compete. So can a covenant connected to the sale of a business where the person restricted receives value from the sale (Utah Code § 34-51-202).

If you run a medical, dental, or therapy practice in Provo, Orem, or anywhere else in Utah County, this is the change that should send you back to your offer letter templates. A non-compete signed with a new associate today isn't just risky. It's void, and presenting one can sour a hire you worked hard to land.

What's the Risk of Enforcing an Overbroad Non-Compete?

If you sue or arbitrate to enforce a non-compete and it's held unenforceable, Utah law makes you pay the former employee's attorney fees, court or arbitration costs, and actual damages (Utah Code § 34-51-301).

That fee-shifting provision changes the math on aggressive enforcement. Sending a cease-and-desist letter over a shaky covenant isn't a free move, because it can prompt the employee's new employer to fund a declaratory judgment action, with your company covering both sides' fees if the covenant fails.

A pattern we regularly see with Utah County employers, especially fast-growing Silicon Slopes companies, is a non-compete copied from an out-of-state template: a two-year term, nationwide scope, signed by everyone from senior engineers to front-office staff. Under Utah law the two-year term alone voids the agreement for employees, and trying to enforce it anyway is how an employer ends up paying the other side's legal bill.

What Should Utah Employers Use Instead of a Non-Compete?

For most positions, a well-drafted non-solicitation agreement plus a confidentiality agreement protects what actually matters, without the one-year cap or the enforcement risk that comes with a true non-compete.

Because the statute excludes them from the definition of a post-employment restrictive covenant, non-solicitation and confidentiality agreements aren't subject to the one-year limit. They also aim at the real problem. What most employers fear isn't a former employee working somewhere else; it's that employee taking customers, patients, coworkers, or trade secrets along. Utah trade secret law protects genuinely secret information regardless of any agreement, and a focused non-solicit handles the rest. Reserve true non-competes for the small set of roles where a departure creates real competitive exposure, keep them to one year, and match the geography to where you actually do business.

For healthcare employers, non-solicitation and confidentiality agreements remain available, with the one new caveat that they can't block a departing provider from telling patients where to find them. If your agreements predate May 2026, or came from a template you can't trace, having your hiring documents and restrictive covenants reviewed is a small project compared to litigating a void agreement.

Frequently Asked Questions About Utah Non-Compete Law

Q: Can my Utah company still use non-competes for regular employees in 2026?

A: Yes, for non-healthcare employees. The agreement must be limited to one year after employment ends, must protect a legitimate business interest, and must be reasonable in scope and geography. Longer terms are void under Utah Code § 34-51-201.

Q: Do Utah's non-compete rules apply to small businesses?

A: Yes. Unlike the discrimination statutes, which generally reach employers at 15 or 20 employees, the Post-Employment Restrictions Act has no headcount threshold. A five-person shop and a 500-person company follow the same rules.

Q: Are non-solicitation agreements still enforceable in Utah?

A: Yes. Non-solicitation and confidentiality agreements are excluded from the statute's one-year cap and remain enforceable if reasonably drafted. The one new limit: as of May 6, 2026, a non-solicit can't prevent a healthcare worker from telling patients where the worker currently practices or will practice next.

Q: What about a non-compete my healthcare employee signed before May 6, 2026?

A: The ban applies to agreements entered into on or after May 6, 2026, so an older agreement isn't automatically void under HB 270, though it still has to satisfy the one-year cap and the reasonableness rules. Have counsel review it before you rely on it, because enforcement of a defective covenant carries fee-shifting risk.

Q: Can I require a non-compete when I sell or buy a business?

A: Yes. Covenants connected to the sale of a business are treated differently under Utah Code § 34-51-202, and the healthcare ban has a sale-of-business exception where the restricted person receives value from the sale. These can run longer than one year, but they still need careful drafting.

Talk to a Utah Business Attorney

Fox Law Utah advises small businesses across Utah, Salt Lake, and Summit Counties on employment agreements, restrictive covenants, handbooks, and the contract questions that come with growing a company. Reviewing your non-compete and non-solicitation templates now costs a fraction of defending a void agreement later, and after the May 2026 changes, healthcare employers in particular shouldn't wait for a dispute to find out where they stand.

Contact Fox Law Utah today at 801-251-6124 or through our contact form at https://www.foxlawutah.com/contact-us to schedule a consultation. You can also learn more about our business advocacy services for Utah employers.

About the Author

Andrew Fox is a Utah attorney and the founder of Fox Law Utah. He advises Utah small businesses on employment law, employee handbooks, hiring and termination decisions, and contract review, working with companies across Salt Lake, Utah, and Summit Counties.

This article is for informational purposes only and does not constitute legal advice. Every agreement and every business is different. Contact Fox Law Utah for guidance specific to your situation.