On March 24, 2026, Utah House Bill 270 (Healthcare Worker Post-employment Amendments) was signed into law, amending Utah’s Post Employment Restrictions Act by prohibiting new healthcare non-compete agreements and limiting certain healthcare non-solicitation terms.

The law voids (1) healthcare non-compete agreements entered into by covered healthcare workers and (2) non-solicitation terms that prevent a healthcare worker from informing patients of the worker’s current or future place of employment.

This update applies to Utah healthcare employers that use covenants with licensed healthcare workers, regardless of size, and takes effect on May 6, 2026.

What Employers Need to Do

• Review restrictive covenant templates used on or after May 6, 2026, to remove healthcare noncompete provisions and ensure any non-solicitation language permits covered healthcare workers to inform patients of the worker’s current or future place of employment.

• Confirm Worker Coverage Under the Statute’s Definitions: Determine whether each role meets the statute’s definition of a covered healthcare worker.

• Re-check severance and sale-of-business restrictive covenants for healthcare workers to ensure they fall within the statute’s preserved exceptions and are drafted for enforceability under common law.

• Treat enforcement decisions as high-risk and document the analysis before sending demand letters, initiating arbitration, or filing suit, given the fee shifting and damages exposure if a covenant is found unenforceable.

Overview

• Healthcare Post-employment Covenants—Key Limits: Starting May 6, 2026, healthcare employers must stop using (and should remove from templates) non-competes and patient-communication restrictions that bar a covered worker from telling patients where the worker works now or will work next; such provisions are unenforceable/void.

• Broad Coverage and Carve Out: “Healthcare worker” is defined by a broad list of licensed roles but excludes individuals whose job or contract does not require practicing under the scope of that license.

• Exceptions Preserved: The chapter continues to allow certain non-competes tied to the sale of a business and certain severance agreements (subject to common-law requirements).

• Fee Shifting and Damages: If an employer seeks to enforce a non-compete (including a healthcare non-compete) and it is determined unenforceable, the employer is liable for arbitration costs, attorney fees, court costs, and actual damages.

Key Risks for Employers

• Entering into a Prohibited Healthcare Non-compete After May 6, 2026: Agreements that meet the statute’s definition of a healthcare non-compete and are entered into on or after the effective date are void.

• Overbroad Non-solicitation Language that Blocks Patient Communications: Any healthcare non-solicitation covenant that prevents a provider from telling patients where the provider currently works or will work next is void.

• Coverage Misclassification: Misidentifying whether a role is a covered “healthcare worker” (or whether the job actually requires practice under the license) can lead to invalid covenants and avoidable disputes.

• Legacy Template Contamination: Using older restrictive covenant templates (especially “standard” non-competes) after May 6, 2026, can create repeat noncompliance across hires and separations.

Additional Information

• Key Sections Updated/Enacted: The enrolled bill amends definitions and remedies in the Post Employment Restrictions Act and enacts a new non-solicitation section applicable to healthcare workers’ patient communications.

• Fee Shifting and Damages Exposure from Failed Enforcement: If an employer seeks to enforce a non-compete, including a healthcare non-compete, and it is determined unenforceable, the employer can be liable for arbitration costs, attorneys’ fees/court costs, and actual damages.

Source Reference

• Utah HB 270 – Healthcare Worker Post-Employment Amendments

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