CEOs, Founders and VCs Call for Changes to Utah's Outdated Non-Compete Laws to Enhance the Freedom to Work

SILICON SLOPES, UT--(Marketwired - March 04, 2016) - Today several Utah tech leaders joined together to voice their concerns about Utah's antiquated non-compete laws as the state Legislature considers important reforms included in HB 251.

"In today's economy -- where talent is everything -- Utah has a unique opportunity to gain an edge by changing these legacy laws which stunt innovation and fly in the face of free markets," said Dave Elkington, CEO of InsideSales.com. "When employers take care of their employees and build trust, employees become better partners in your business. Strengthening intellectual property and other protections for unique and proprietary business assets is one way to ensure balance."

One of the reasons Silicon Valley is a great hotbed of innovation is talented people are drawn to opportunity and attracted to an environment that does not cap economic growth and innovation.

"No one area has an exclusive on talent," said Ryan Smith, co-founder and CEO of Qualtrics. "If we want to continue attracting the best talent to Utah, we need to cultivate an environment where opportunity and innovation thrive. That means getting rid of old-school restrictions that hurt growth."

It still makes sense to maintain and enforce non-compete agreements for senior executives and others who routinely enjoy access to highly sensitive and proprietary information.

"As long as employees don't harm their former companies by taking proprietary information, they should be free to work where they choose," said Josh James, founder and CEO of Domo. "We respect that there are other opinions and realize that old legacy businesses may see this as a threat to their empires, but removing these employment restrictions will actually spur business innovation, not stifle it. You either believe in a free-market economy or you don't."

Brandon Tidwell, Managing Director at Signal Peak Ventures, said, "We strongly believe that allowing the free flow of talent is best for Utah's economy and we will encourage our portfolio companies to opt into this pledge to remove non-competes." 

While these changes are sure to cause some discomfort in the Utah business community, there is ample evidence that these changes will fuel economic growth and development by empowering entrepreneurs to build stronger companies. That's why other high-tech hubs, such as California, Massachusetts and Washington, have either removed non-compete restrictions or are considering legislation similar to the bill in the Utah Legislature.

"Non-competes too often hinder hiring and innovation by restricting the fluid movement of employees across a region," said John Pestana, Co-Founder of ObservePoint. "In Utah, where the cycles of innovation and entrepreneurship are spinning faster than ever, non-compete policies risk keeping high-impact individuals in low-impact roles. It's like trying to steer a speedboat while dragging anchor."