CO, ID, UT: Recent Restrictive Covenants Updates in Colorado, Idaho, and Utah

APPLIES TO

Certain Employers with Employees in CO, ID, UT

EFFECTIVE

Varies; See Below

QUESTIONS?

Contact HR On-Call

(888) 378-2456

Colorado

On April 2, 2018, the Colorado governor signed SB 18-082, which amended state law related to physician noncompete agreements, allowing physicians to disclose their continuing practice and contact information to a patient with a rare disorder whom they have been providing treatment. This amendment is meant to avoid disruptions in treatment for patients with rare disorders. Review the recent bill here.

Additionally, on March 8, 2018, the Colorado Court of Appeals, in Crocker v. Greater Colorado Anesthesia, rejected a liquidated damages provision in a physician noncompete clause because it was not reasonably related to “any injury [the employer] actually suffered due to [the physician’s] departure,” determined upon termination from employment. Employers should review restrictive covenants consistent with this new ruling.

Idaho

On March 28, 2018, Idaho’s governor allowed the repeal of a portion of the state’s noncompete law to take effect without his signature. Previously, a company seeking to enforce a noncompete agreement against key employees or independent contractors could obtain an injunction against the person with a rebuttable presumption of irreparable harm that the employee had to disprove by showing he or she had “no ability to adversely affect the employer’s legitimate business interests.” The rebuttable presumption has now been removed and the employer must show an adverse effect on its business interests before an injunction will be issued.

Utah

Effective May 8, 2018, Utah recently enacted HB 241 limiting noncompete provisions against exempt broadcasting employees unless they are paid a weekly salary of at least $913 (i.e., $47,476 per year). Additionally, the restrictive covenant must be in a written employment agreement with a term of no more than 4 years, and the employee is either terminated for cause or the employee breaches the employment agreement in a manner that results in the employee’s termination. Additionally, the post-employment restrictive covenant must end the earlier of one year after termination or when the employment contract ends.

Action Items

  1. Have restrictive covenant provisions and agreements reviewed and updated consistent with these changes.
  2. Subscribers can call our HR On-Call Hotline at (888) 378-2456 for further assistance.

Disclaimer: This document is designed to provide general information and guidance concerning employment-related issues. It is presented with the understanding that ManagEase is not engaged in rendering any legal opinions. If a legal opinion is needed, please contact the services of your own legal adviser.

© 2018 ManagEase

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