Utah Joins the Trend to Ban Non-Competes in the Healthcare Industry

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Patricia Tsipras

April 20, 2026

In a significant shift for the healthcare industry, Utah’s HB 270—Healthcare Worker Post-Employment Amendments—will take effect on May 6, 2026, altering the enforceability of non-compete agreements for healthcare professionals.  This legislation reflects a growing trend across the United States to limit restrictive covenants in employment contracts, particularly in industries where workforce mobility and patient care continuity are critical.  For healthcare employers in Utah, understanding the implications of HB 270 is essential to ensure compliance and to strategically adapt to the new legal landscape.

Key Provisions of HB 270

HB 270 prohibits most non-compete agreements between healthcare employers and healthcare workers.  Specifically, the law voids any non-compete agreement entered into on or after May 6, 2026, that restricts a healthcare worker from providing services within their licensed scope of practice for a specified period or within a defined geographic area.  Thus, healthcare employers can no longer rely on traditional non-compete clauses to prevent former employees from working for competitors or starting their own practices.

“Healthcare workers” are defined broadly to include physicians, nurses, and other licensed healthcare providers.

Importantly, the law does not retroactively apply to non-compete agreements signed before May 6, 2026.  Existing agreements will remain enforceable under the terms and conditions in place at the time they were executed.

Protecting Employer Interests Post-HB 270

While HB 270 eliminates most non-compete clauses, it does not leave employers without options to protect their legitimate business interests.  Employers still can utilize other contractual tools, such as:

• Nonsolicitation Agreements: Employers may include nonsolicitation clauses in employment agreements to prevent former employees from soliciting patients or staff. However, these agreements must now include a disclaimer allowing healthcare workers to inform patients about their current or future practice locations, ensuring continuity of care.
• Confidentiality and Nondisclosure Agreements: Employers can safeguard sensitive business information, such as trade secrets, patient lists, and proprietary processes, through robust confidentiality or nondisclosure agreements. These agreements remain enforceable under Utah law and are not affected by HB 270.

Strategic Considerations for Healthcare Employers

The passage of HB 270 underscores the importance of adapting to a more employee-friendly regulatory environment.  Healthcare employers should take the following steps to ensure compliance and maintain a competitive edge:

• Review Existing Contracts: Employers should audit their current employment agreements to identify any non-compete clauses that may need to be revised or removed for contracts executed after May 6, 2026.
• Update Employment Policies: Employers should work with legal counsel to update their employment policies and agreements to reflect the new legal framework, including ensuring that nonsolicitation and confidentiality agreements are appropriately tailored and enforceable.
• Educate Leadership and HR Teams: Training leadership and human resources personnel on the implications of HB 270 is critical to ensure consistent and lawful implementation of employment practices.
• Monitor Legislative Developments: As the legal landscape continues to evolve, staying informed about legislative changes and court interpretations of HB 270 will be essential for long-term compliance and strategic planning.

Looking Ahead

Utah’s HB 270 represents a paradigm shift in the regulation of healthcare employment contracts, prioritizing workforce mobility and patient care continuity.  By proactively adapting to changes such as this one, healthcare employers can position themselves for success in a competitive and dynamic industry.

The author of this article, Patricia Tsipras, is a member of the Bar of Pennsylvania.  This article is designed to provide one perspective regarding recent legal developments, and is not intended to serve as legal advice in Pennsylvania, Utah, or any other jurisdiction, nor does it establish an attorney-client relationship with any reader of the article where one does not exist.  Always consult an attorney with specific legal issues.