Understanding Non-Compete Agreements in Utah’s Hemp Industry
Utah’s hemp industry is on the rise, which poses a question for many in the state: how can these professionals ensure that their career progress isn’t stalled by a burdensome contract? In a state where comprehensive non-compete agreements are extremely common, employees must stay aware of what they are getting into if they choose to sign one. These types of agreements are becoming more prevalent in the hemp industry, and you should therefore remain aware of the potential drawbacks they often bring.
What is a Non-Compete Agreement Anyway? When a new employee is hired, they are often required to sign a contract that includes a non-compete clause. This is essentially an agreement between the employee and the employer that will prohibit the individual from working with a competitor in the industry. Chestnut Employment Law notes that the goal of these agreements is to prevent former employees from utilizing any proprietary information to benefit another business or a potential start up. The Utah Code Annotated states that in order for a non-compete contract to be legally binding, it must fall within specific parameters:
- The employee must receive valuable consideration for signing the agreement
- Time restrictions must be reasonable and must not exceed the amount of time the individual would likely stay with the company
- Scope restrictions must be reasonable, such as a certain geographic area in which the worker cannot compete with the company
- The restriction must be necessary in order to protect trade secrets.
And according to Hanes & rer, non-compete agreements simply can’t last longer than 12 months in the industrial hemp industry, even if they could in other industries. While these restrictions can be devastating to a growing business, it’s crucial that your business practices comply with any current regulations, lest you open yourself up to legal consequences. If you’re looking for a breakdown of non-competes in Utah and how they affect you and your business, check out the full legal overview proposed by Green & Nock.
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