News coverage of a bill that would do away with the infamous "noncompete" clause in Utah workers' contracts has raised the hackles of Utah House Speaker Greg Hughes, R-Draper. In a March 3 interview, Hughes spoke about House Bill 251 and his concerns with treatment of workers at local broadcast media outlets, many of whom are required to sign noncompete agreements. As a result, Hughes claims media owners may be stifling coverage of the bill and/or attempting to influence voter opinions without disclosing their own use of noncompete clauses.
The Deseret News
has been particularly outspoken against the bill. In an editorial published online
on March 1, the Deseret New
s slammed legislation that would ban employers in most cases from using noncompete agreements—contracts employees are required to sign when they're hired that prohibits them from going to work for competing companies when they leave their current employers, whether they leave voluntarily or are fired. The Deseret News
, along with KSL Channel 5 and KSL News Radio, are operated by Deseret Management Company, a for-profit arm of the LDS Church.
The editorial reads, in part, that “free markets depend upon the ability of individuals and the companies that employ them to contract freely to mutual advantage. It is a highly paternalistic understanding of contract law that seeks to have government, outside of protections against force or fraud, restrict what private parties can include in a contract. …[Lawmakers] need to ask themselves why this bill is necessary and why they should jeopardize Utah’s booming economy to fix a problem no one seems able to articulate.”
Hughes takes offense at the editorial, he says, because KSL and other local broadcasters hold their reporters to noncompetes. “Reporters can’t leave KSL and go work for Channel 4," Hughes says, "So the parent company of the Deseret News sends out an editorial and rips on the bill, claiming [the bill is] anti-free market.
"Meanwhile," he continues, "[Deseret Management Corp. is] quietly lobbying to defeat this bill, so that if you’re a reporter and you leave [the company], you have to pull your kids out of school and leave the state to find another job in broadcast journalism. And their editorial never discloses this. For the paper to publish its opposition to the bill, never disclosing to the reader that [Deseret Management Corp.] uses noncompetes, is a conflict of interest and is absolutely hypocrisy.”
Hughes also claims that he believes broadcast journalists aren’t reporting on HB251—sponsored by Rep. Mike Shultz, R-Whooper, and Sen. Stuart Adams, R-Layton—as much as they normally would, because the journalists feel intimidated by their employers.
In an email to City Weekly,
Scott Taylor, opinion editor at the Deseret News,
says that the editorial only represented Deseret News Publishing Co., which does not use noncompete restrictions and is not representative of KSL or other entities it is affiliated with. Taylor also pointed to other news coverage
published by the Deseret News
on March 1, where the paper included the statement “Deseret Management Corp., which owns the Deseret News
as well as KSL television and KSL radio, in some cases uses noncompete agreements in its broadcast properties.”
Calls and emails requesting comment from KSL were not immediately returned.
Hughes says he’s not sure if the LDS Church itself is behind the efforts to defeat the bill, saying “I don’t know how high the food chain on this goes, but what I absolutely do know is that [Deseret Management Corp.] is lobbying against the bill, while they are printing editorials criticizing it and never disclosing their inherent stake in this and how it impacts their owners.”
The issue of noncompete agreements, however, goes well beyond broadcast journalism. Employees in almost every sector can find themselves under the same restrictions, whether you work at a tech company like Adobe or, according to Fortune magazine
, even a minimum-wage job at sandwich company Jimmy John's, both of which use the contacts.
Niki Chan Wiley
House Speaker Greg Hughes, R-Draper.
“We’re an at-will state, an employer can hire or fire you for any reason,” Hughes says. “But if an employer can fire you for any reason, and then can he also keep you from getting a job in your chosen field anywhere else? That’s where organized labor is needed.”
Hughes says the “pendulum has swung too far” away from workers' rights, and that employers shouldn’t be able to prohibit workers from making a living once they have left the company. “When employers become abusive, and they treat people like property, employees begin to organize against it.”
Hughes was careful to add that he’s not in favor of unions becoming too strong, because then he believes they “strangle” the businesses, but he says, "There’s so much abuse out there that I think we’ve got to do something.”
Local businesswoman Nineveh Dinha, a former broadcast journalist for local outlet Fox 13, agrees with Hughes and says that while she has no plans to return to her former career in journalism, she should have the freedom of choice to go back if she wants to. “I have personally seen colleagues of mine be forced to move their families out of state,” Dinha says. She adds that she believes the restrictions automatically put employees at a disadvantage with their employer, saying “these noncompetes take away any leverage we might have in salary negotiations.”
The business lobby, however, is joining in the efforts to oppose the bill. Dewey Reagan, president of billboard company Reagan Advertising, says that his company requires many of its employees to sign noncompete agreements. He argues that because businesses spend the time to train employees in how to work in their chosen career fields, businesses should have the right to restrict how that training is used. “As [employees] do their job, they learn how to do things using our information,” Reagan says. “So it would be detrimental to [Reagan Advertising] to lose the ability to keep individuals from walking away and walking across the street and using the time, money, and management energy we’ve spent to train them to compete against us.”
HB 251 passed the full House on Feb. 24th and is currently awaiting a hearing in the Senate Business and Labor committee. CW
In addition to covering state politics for
City Weekly, Eric Ethington is communications director for Political Research Associates.