Broadcast the news: no noncompetes for TV and radio talent in Utah

LEGISLATION

May 2018
Ryan B. Frazier
Utah Employment Law Letter

Do you ever watch a particular news program because of the news anchors or listen to a certain radio program be­cause of the announcer? Viewers and listeners usually tune in to programs based on how entertaining or engaging they find the show, which is frequently a byproduct of how personable and likeable the announcer is. The best radio, television, and cable personalities have a certain on-air identity that viewers and listeners find attractive. In short, they have an engaging media persona with which viewers connect. That persona car­ries with it a certain cachet, and media personalities sometimes even become icons. When they are seen as the veritable “face” of the program, the broadcaster’s loss of their talent could be devastating to the program’s ratings.

Because their competitors would love to lure away popu­lar news anchors or radio presenters, it’s no wonder that radio, TV, and cable broadcasters love to lock up their on-air talent with noncompetition agreements. But that has been changing across the country—and it’s now starting to change in Utah. As you may recall, it wasn’t that long ago that the Utah Legisla­ture limited new noncompete agreements to one year. In 2018, state lawmakers enacted a new law that will have an impact on when and under what circumstances noncompetes can be used in connection with radio, television, and cable news anchors and reporters and other on-air personalities. In some cases, the use of noncompetes is simply banned. This article discusses the new law and its effect on the broadcasting industry.

Unfettered competition for talent?

Utah has followed other states that have imple­mented laws banning noncompetition agreements for broadcast journalists, including television and radio announcers. During its 2018 session, the Utah Legisla­ture passed House Bill (HB) 241, and Governor Gary Herbert signed the bill into law. The new law prohibits noncompetes for employees of radio, television, and cable companies, including on-air personalities and an­nouncers who make $913 per week or less (i.e., $47,476 annually). Noncompetes for employees making more than that are not prohibited.

However, the ban is subject to a host of qualifica­tions. Foremost, broadcasting noncompetes will be al­lowed for employees with employment contracts for a term of four years or less. Further, a noncompete can be permissible if a breach of the employment agreement results in the employee being discharged or if the em­ployee is fired for cause. However, those terms would have to be spelled out in the noncompete agreement.

Of course, even permissible broadcasting non­competes would be subject to the one-year statutory limitation applicable to all noncompetes in Utah. Any noncompete that lasts longer than one year is subject to being declared void. And there’s no indication that Utah courts would “blue-pencil” a noncompete that exceeds the one-year cap to reduce the noncompetition period to the permissible one year.

In light of all that, broadcast businesses must take care to ensure that their noncompetes are consistent with the new statute. If a Utah court declares a broad­caster’s noncompete void, the employee would be enti­tled to attorneys’ fees and litigation costs in addition to any damages she could show she sustained.

Bottom line

The situations in which broadcast noncompetes are valid under HB 241 are limited. A broadcaster will face liability if it is found to be enforcing a noncompete in Utah in violation of the new law. As a result, many broadcast employers have simply decided that they won’t include noncompetes in their on-air talents’ em­ployment contracts. While that’s certainly the most cau­tious approach to avoiding liability, it isn’t required by the new law.

As we mentioned, there are situations in which non­competes will continue to be permissible in this special­ized industry. Undoubtedly, courts will painstakingly analyze such covenants, so they must be carefully crafted to ensure they meet the new law’s strict require­ments. It may be helpful to consult with legal counsel for assistance in drafting language that will comply with the strictures of the law.

You can contact the author at rfrazier@kmclaw.com or 801-323-5933.




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