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Utah House votes to restrict noncompete contracts in broadcast media

SALT LAKE CITY — The House overwhelmingly passed a bill Wednesday that would restrict the use of noncompete contracts in the broadcasting industry in Utah after amending the bill to not target all media.

"As I look around and hear the different stories and as these issue are brought to me, it is clear to me that the abuses inside the broadcasting industry with these noncompetes are widespread," Rep. Mike Schultz, R-Hooper, said during floor debate his bill, HB241.

Schultz pointed to dozens of emails he said he has received from journalists who "absolutely" favor the measure but fear retribution from their stations if they speak out.

Utah's major television stations — KSL, KUTV, KTVX and KSTU — oppose the bill. They contend that they put many thousands of dollars into developing and promoting on-air personalities that viewers have come to trust as credible sources of news.

Deseret Management Corp., which owns Bonneville International Corp., KSL, Deseret Digital Media and the Deseret News, uses noncompete agreements in some cases in its TV and radio properties.

The bill would prohibit broadcast media outlets from using noncompete contracts for employees who make less than $47,500 per year. Employees who earn more than that could enter into those agreement with certain restrictions, including limiting a contract to four years. If any employee is fired for just cause, the noncompete clause would be valid, but if the employer breaks the contract, it would not be enforced.

Schultz carved newspapers — which by and large don't use noncompete contracts — out of the bill as well as made other changes from the orignal proposal. The House passed the bill 62-12.

Rep. Merrill Nelson, R-Grantsville, argued against the measure, saying, "This is rather startling to me." He said the federal and state constitutions prohibit laws that single out a particularly industry.

"If noncompetes are so evil, if they are so destructive, if they are so violative of employee rights, then let's apply the prohibition across all industries, across all employers, not just pick out one industry with five employers," he said.

Nelson said the state also has laws against the impairment of contracts that employers and employees are free to enter into.

"What we're saying as a Legislature is we disagree with a contract that you've privately negotiated, that you privately agreed upon," he said.

Nelson warned that passing the bill could open the state to a lawsuit.

But Rep. Tim Hawkes, R-Centerville, said he is confident the law would be on firm legal ground. He said the reason the bill singles out broadcasting is because noncompete contracts silence the media who are uniquely positioned to be a voice of trust in the community.

"That goes right to the heart of the First Amendment," he said.

Hawkes said TV stations won't report on the issue, so broadcasters have to be singled out to protect a free press.

"Do you see any cameras? We have big bills up here all the time," he said. "Here we have a big bill that affects the media. There's no cameras here."