Carl GrahamYou accepted a job offer with a two-year non-compete clause. Your colleagues say Utah voided it after 12 months. Your new employer's counsel says it's still valid. Who's right — and what exactly are you bound by?
Utah's Post-Employment Restrictions Act (PERA) [Utah Code § 34-51-201] caps post-employment non-competes at one year — but PERA's limit applies only to non-competes, not to non-solicitation agreements, which remain enforceable beyond 12 months if otherwise reasonable. The line between the two types of restriction is where most Utah enforcement disputes actually live. This article compares the three types of post-employment restrictions Utah employers use, what courts actually enforce, and how Utah stacks up against other states in this arena.
Three Types of Post-Employment Restrictions in Utah
Most employment agreements use a combination of three distinct restriction types — often bundled in one "restrictive covenants" section. Understanding what each covers is the starting point.
| Restriction type | What it prohibits | Max duration under PERA | Standard of review |
|---|---|---|---|
| Non-compete | Working for a competitor in a defined role/geography | 1 year from separation | Strict: must have legitimate business interest, reasonable scope |
| Non-solicitation (customers) | Soliciting the employer's customers you served | Not capped by PERA | General reasonableness |
| Non-solicitation (employees) | Recruiting the employer's employees | Not capped by PERA | General reasonableness |
| Non-disclosure / NDA | Sharing confidential information or trade secrets | Duration of confidentiality | Minimal — courts strongly enforce |
Source: Utah Code § 34-51-201 (PERA), Utah Uniform Trade Secrets Act § 13-24-101
The critical takeaway: PERA's one-year cap applies only to non-compete restrictions. A two-year non-solicitation clause — preventing you from calling your former clients for two years — is legal under PERA if it passes the general reasonableness test.
Non-Compete Agreements Under PERA: What "One Year" Actually Means
The 12-Month Clock
PERA's one-year limit starts running from the date the employee "leaves the employ" of the company — not the date the agreement was signed. A two-year non-compete signed at hire automatically becomes a one-year non-compete under PERA. Any contractual provision purporting to extend the restriction beyond 12 months is void and unenforceable from the 12-month mark onward.
Scenario: Daniel, a software engineer, joins a Salt Lake City SaaS company and signs a non-compete preventing him from working at any competitor in the Western United States for two years. He resigns in January 2025 and accepts a job at a competing firm in February 2026 — 13 months after leaving. His former employer threatens legal action. Under PERA § 34-51-201, the restriction expired in January 2026. Daniel is free to work at the competitor. Any lawsuit filed after month 12 would be subject to the $1,000 civil penalty for attempting to enforce a void agreement [Utah Code § 34-51-301].
What Remains Restricted After 12 Months
PERA does not protect employees from all post-employment obligations. After the non-compete window closes:
- NDAs remain fully effective — confidential information disclosed during employment stays protected indefinitely
- Non-solicitation clauses (if separate from the non-compete) remain enforceable if they pass the reasonableness test
- Customer relationships built on employer's goodwill — courts have held that targeting former employer clients using confidential customer lists can constitute misappropriation of trade secrets even without a non-solicitation clause
À retenir: The expiration of a PERA non-compete after 12 months does not mean the employee is free of all obligations. Non-disclosure and non-solicitation restrictions may outlast the non-compete and are independently enforceable.
The Reasonableness Test: What Utah Courts Actually Enforce
Even within PERA's one-year window, a non-compete must satisfy the general enforceability standard. Utah courts evaluate:
Legitimate business interest: The restriction must protect a real interest — trade secrets, confidential client relationships, or proprietary methods. Preventing an employee from simply competing is not a legitimate interest.
Reasonable geographic scope: A restriction covering "all of North America" for a company with six Utah-area clients has no defensible geographic connection to the business interest asserted.
Reasonable activity scope: The restriction must be tied to the employee's actual role. A blanket ban on "any work in the software industry" for a customer service representative has no nexus to the business interest served by the restriction.
Adequate consideration: The employee must have received something of value — in Utah, continued employment alone is sufficient consideration only if the employee was given advance notice before signing. Courts have split on whether a surprise non-compete presented on the first day of work (after the offer letter was already accepted) meets the consideration requirement.
Courts in Utah's Third Judicial District (Salt Lake City) have blue-penciled — meaning judicially narrowed — overly broad non-competes rather than voiding them entirely. This means employers who draft overbroad agreements do not always lose; instead, the court may enforce a reduced version. Employees cannot always count on an overly broad non-compete being thrown out in its entirety.
For comparison, Florida enforces non-competes under § 542.335 with a strong employer-favoring presumption of validity, while Utah's PERA sets a harder duration ceiling with a penalty for overreach. The Utah Labor Law dossier covers the full labor framework that contextualizes these restrictions.
Employer Risks: The $1,000 PERA Penalty
PERA created a civil penalty that flips the enforcement dynamic. Before 2016, the risk in non-compete disputes ran primarily against employees — a former employer could seek an injunction stopping the employee from working. Since PERA, employers who attempt to enforce a non-compete they know (or should know) violates the statute face a $1,000 civil penalty per violation [Utah Code § 34-51-301].
This penalty applies when an employer:
- Seeks to enforce a non-compete exceeding one year from separation
- Demands compliance with a non-compete that exceeds reasonable geographic or activity scope
- Sues or threatens to sue on a PERA-void restriction
The penalty shifts leverage in pre-litigation disputes. When an employer sends a cease-and-desist letter citing a void non-compete, the employee's attorney can respond by threatening a PERA penalty claim. This has resulted in a marked increase in employer willingness to negotiate or abandon overreaching non-compete claims in Utah since 2016.
Sale-of-Business Exception
PERA's one-year cap does not apply to non-competes entered in connection with the sale or transfer of a business. Under § 34-51-102(4), a seller who signs a non-compete as part of a business sale can be bound for the duration specified in the purchase agreement — often three to five years — because the restriction is part of a commercial transaction, not an employment relationship.
This exception is frequently misused: employers sometimes structure employment agreements as "business sale" agreements to avoid PERA. Utah courts have rejected this approach and apply PERA when the underlying relationship is employment rather than a genuine business acquisition.
Avertissement: This article is for informational purposes only and does not constitute legal advice. Non-compete disputes are highly fact-specific. Consult a Utah employment attorney to assess your specific agreement.
Practical Guidance: Employers vs. Employees
For employers drafting new post-employment restrictions in 2026:
- Keep non-compete duration at 11 months or fewer — the one-month buffer above the 12-month line protects against disputes about the "date of separation"
- Draft non-solicitation clauses separately from non-compete clauses — this allows non-solicitation to survive even if the non-compete is challenged
- Document the legitimate business interest in the agreement itself (specify the trade secrets, customer relationships, or confidential methods being protected)
- Avoid nationwide geographic scope unless the business genuinely operates nationally and the employee had national client-facing responsibilities
For employees reviewing a non-compete before signing:
- Check the duration: anything over 12 months is unenforceable as a non-compete under PERA, but the employer may still attempt to enforce it (creating a dispute you'll need to resolve)
- Read the non-solicitation clause separately — it may survive PERA and restrict your access to former clients or colleagues for longer
- Ask what consideration you're receiving beyond the initial job offer: if this is a post-hire addition, consider whether adequate consideration was provided
Compared to New Jersey's pending non-compete legislation, Utah's PERA provides more established employer clarity — but New Jersey is moving toward stricter employee protections that could eventually outpace Utah's statutory framework.
