Utah will not enforce a nondisclosure or non-disparagement clause to the extent it silences an employee’s discussion of sexual assault or sexual harassment, under Utah Code §34A-5-114. NDAs remain fully enforceable for trade secrets and other legitimate confidential business information. Employers who try to enforce a barred clause risk paying the other side’s attorney fees, and employees who sign certain settlement agreements get a short window to change their minds.
TL;DR:
- Utah law restricts enforcement of nondisclosure and non-disparagement clauses that prevent discussion of sexual assault or harassment for both current and former employees, including predispute agreements.
- Settlement agreements with such clauses give employees a three-business-day window to withdraw their consent after signing, emphasizing the importance of prompt action.
- Trade secret protections remain valid and unaffected by the law, provided confidentiality clauses are narrowly drafted and do not sweep in misconduct disclosures.
- Federal and Utah laws overlap but are not identical, so clauses must be reviewed carefully to ensure enforceability under both legal frameworks.
- Employers must avoid overbroad confidentiality language and regularly update templates to comply with current law and reduce legal risks.
Table of Contents
- What Utah Code §34A-5-114 says and who it covers
- What NDAs still protect in Utah: trade secrets and lawful confidentiality
- How the federal Speak Out Act interacts with Utah law
- Post-employment restrictions vs. NDAs: why the one-year noncompete rule isn’t a one-year limit on NDAs
- Remedies, employer risks, and anti-retaliation protections
- Practical next steps for employees and employers in Utah
- Drafting and compliance tips from Loayza Law
- Why this change matters for Utah clients
- How Loayza Law can help
- Sources
- FAQ
What Utah Code §34A-5-114 says and who it covers
Utah’s law, enacted through HB0055 in 2024, targets a specific problem: employers using confidentiality paperwork to keep victims of sexual assault or sexual harassment quiet as a condition of getting or keeping a job. The statute defines several terms precisely, and those definitions decide what a court will and will not enforce.
A “nondisclosure clause” or “confidentiality clause” is contract language that restricts someone from discussing or disclosing information, including the existence of a settlement. A “non-disparagement clause” restricts someone from making negative statements about a person or company. Both become unenforceable under Utah law to the extent they prevent or effectively prevent an employee from discussing sexual assault, an allegation of sexual assault, sexual harassment, or an allegation of sexual harassment.
The law reaches both current and former employees, and it applies whether the restriction shows up in an employment contract signed before any dispute exists or in a settlement agreement signed after one arises. That second category carries an extra safeguard.
- The statute covers predispute confidentiality clauses in employment agreements; not just settlement paperwork.
- Settlement agreements that include a nondisclosure or non-disparagement clause tied to sexual misconduct give the employee a three-business-day window to withdraw.
- The protections apply to current and former employees alike, regardless of when the underlying conduct occurred.
Because HB0055 took effect in 2024, the practical question for older agreements is not when the conduct happened but whether the clause is being enforced now. A restriction drafted years ago does not become lawful simply because the contract predates the statute.
What NDAs still protect in Utah: trade secrets and lawful confidentiality
None of this makes confidentiality agreements pointless. Utah’s law targets sexual misconduct disclosures specifically, and everything else a well-drafted NDA typically protects stays intact.
Trade secrets remain the clearest example. The Utah Uniform Trade Secrets Act, codified at Utah Code §§13-24-1 to 13-24-9, gives businesses a statutory framework for protecting proprietary formulas, client lists, pricing models, and similar information, with injunctive relief, damages, and attorney fees available to a business whose trade secrets are misappropriated. A separate federal requirement matters here too: agreements that govern trade secrets and were entered into or updated after May 11, 2016 generally need a Defend Trade Secrets Act immunity notice, and leaving it out can bar a company from recovering exemplary damages and fees against an employee, according to a summary of Utah trade secret law.
- Proprietary business information, client lists, and pricing strategies remain legitimately protectable.
- Settlement amounts can still be kept confidential, since the statute targets misconduct disclosures rather than dollar figures.
- A victim’s own request to keep their identity private is different from an employer imposing silence and generally does not run afoul of the statute.
Utah’s trade secret statute sets a three-year discovery-based limitations period for misappropriation claims, which means a business has a defined window to act once it discovers a theft.
The line between lawful and unlawful drafting usually comes down to scope. A clause that says “confidential information includes proprietary client data, product designs, and financial records” is narrow and defensible. A clause that says “confidential information includes anything discussed during employment” is the kind of catchall that courts and regulators view skeptically, because it can be read to sweep in misconduct reports. Disclosures that other law already restricts, such as attorney-client privileged material or information tied to an ongoing criminal investigation, stay off-limits regardless of what this statute permits.
How the federal Speak Out Act interacts with Utah law
Utah employees and employers do not operate under state law alone. The Speak Out Act, a federal law, limits the enforceability of predispute nondisclosure and nondisparagement clauses in disputes involving sexual assault or sexual harassment.
The federal law and Utah’s statute overlap but are not identical. The Speak Out Act focuses on predispute clauses, agreements signed before any allegation arises, and does not preempt state law that offers equal or greater protection. Utah’s statute goes further in at least one respect: it extends its protections to certain settlement agreements too, and it adds the three-business-day withdrawal right that federal law does not provide.
- The Speak Out Act applies nationwide and sets a floor, not a ceiling, for protecting sexual misconduct disclosures.
- Utah’s statute adds protections the federal law does not, including the settlement withdrawal window and specific retaliation prohibitions.
- Anyone evaluating an NDA involving sexual misconduct should check both the federal text and Utah Code §34A-5-114, since either one might apply depending on the clause’s timing and context.
The practical takeaway is straightforward: a clause that survives federal scrutiny is not automatically safe under Utah law, and vice versa. Both sources need a look before anyone assumes a restriction is enforceable.
Post-employment restrictions vs. NDAs: why the one-year noncompete rule isn’t a one-year limit on NDAs
Utah businesses sometimes confuse two separate statutory regimes. The state’s noncompete law, enacted as the Post-Employment Restrictions Act through HB0251, caps most post-employment noncompete agreements at one year. Confidentiality agreements are a different animal, and the Act expressly excludes them from that definition, so an NDA is not automatically capped at twelve months.
That does not give employers a blank check. A confidentiality clause written so broadly that it functionally stops a former employee from working in their field, rather than simply protecting specific information, can be challenged as a disguised noncompete. Courts look past the label on the document to what the clause actually does.
- Duration alone rarely decides the issue; scope and functional effect matter more.
- A clause restricting disclosure of specific trade secrets is different from one restricting all knowledge gained on the job.
- Employers drafting long-term confidentiality provisions should be able to explain, clause by clause, what legitimate interest each restriction protects.
Businesses updating older agreement templates should treat this distinction as a checklist item, not an afterthought, since a mislabeled restriction invites exactly the kind of legal challenge Utah’s newer statutes were designed to support.
Remedies, employer risks, and anti-retaliation protections
Utah’s law does not just declare certain clauses unenforceable. It attaches real consequences for employers who try to enforce them anyway.
- An employer who attempts to enforce a nondisclosure or non-disparagement clause barred by Utah Code §34A-5-114 can be ordered to pay the other side’s attorney fees and costs.
- The employer is not entitled to recover monetary damages for a violation of a clause the statute makes unenforceable, even if the employee did discuss the misconduct.
- Retaliating against an employee for discussing sexual assault or sexual harassment, or for refusing to sign an unlawful clause, is separately prohibited under the statute.
Retaliation under the statute covers more than firing someone. Demotion, reduced hours, exclusion from projects, and similar adverse actions taken because an employee exercised these rights can all qualify. Employees who believe they have faced retaliation should keep dated records of what happened and who was involved, since timelines matter in these disputes.
Pro Tip: Keep a written, dated log of any conversation where an employer references confidentiality obligations tied to a misconduct report; that record often matters more than memory once a dispute reaches counsel.
Courts handling these disputes can issue protective orders or seal sensitive filings when trade secrets are genuinely at stake, which lets a case proceed without exposing proprietary information the statute never intended to unprotect.
Practical next steps for employees and employers in Utah
Knowing the law is one thing. Acting on it correctly, and quickly, is another.
- Preserve every relevant document, message, and email before doing anything else, since evidence tends to disappear once a dispute becomes public.
- If you signed a settlement agreement with a nondisclosure clause tied to sexual misconduct, remember the three-business-day withdrawal window and calendar it immediately.
- Talk to an attorney before signing anything or making a public statement, particularly if an employer has already referenced a confidentiality obligation.
- Report the conduct to the appropriate agency or resource if you have not already, since a formal record can support later legal action.
Pro Tip: Employers should pause any enforcement letter or demand tied to a nondisclosure clause the moment sexual misconduct is mentioned, and route it through counsel before it goes out the door.
Employers face a mirror-image checklist: audit existing NDA templates for overbroad catchall language, add carve-outs that expressly preserve an employee’s right to discuss sexual misconduct, and update settlement templates to build in the required withdrawal window. Anyone reviewing a wage dispute or enforcement letter under similar time pressure can find a useful model in this firm’s guide on how to respond within a 14-day filing window, which walks through the same discipline of acting fast without acting rashly.
Drafting and compliance tips from Loayza Law
Confidentiality agreements written before 2024 need a second look, and new ones need to be built correctly from the start. A few principles guide that work.
- Define “confidential information” narrowly, tied to specific categories like trade secrets, client data, or financial records, rather than a blanket reference to “anything learned during employment.”
- Add an express carve-out preserving the employee’s right to discuss sexual assault or sexual harassment and to make protected reports to government agencies.
- Include the federal Defend Trade Secrets Act immunity notice in any agreement governing trade secrets, since its absence can cost a business its right to certain damages.
- Limit access to trade-secret materials to employees who genuinely need it, and document that access.
- Train staff on where and how to report misconduct so a reporting channel exists before a dispute forces the question.
| Redline item | Why it matters |
|---|---|
| Narrow definition of confidential information | Prevents the clause from being read as an unlawful gag on misconduct reports |
| Express sexual misconduct carve-out | Aligns the agreement with Utah Code §34A-5-114 |
| DTSA immunity notice | Preserves the employer’s right to exemplary damages and fees under federal trade-secret law |
| Settlement withdrawal language | Meets the three-business-day requirement for covered settlement agreements |
These are drafting principles, not a substitute for a lawyer reading the specific agreement in front of you. Businesses updating agreement libraries after a legislative change often run into the same issue this firm has covered when tracking Utah’s common law marriage filing window under SB110: a new law changes what “standard” language actually accomplishes, and old templates stop working quietly, without anyone noticing until a dispute arises.
Why this change matters for Utah clients
This statute shifts real leverage back to employees who have been asked to trade their voice for a settlement check or a job offer. We see the practical effect daily: employers who once treated broad confidentiality language as boilerplate now have to rewrite it, and employees who once assumed silence was the price of a settlement now have options. Legal professionals regularly review and update agreements for clients navigating employment and contract disputes, and this law is one more reason that review should happen before a signature, not after.
— Paralegal
How Loayza Law can help
We handle contract disputes, contract drafting and review, employment-related litigation, and settlement negotiation for clients across Utah. If an employer has asked you to sign a confidentiality clause you are unsure about, or you are an employer trying to bring an old NDA template into line with current law, our practice areas page outlines where we can step in.
Bring any agreement, settlement offer, or enforcement letter you have received to your first consultation. Reach out through our contact page to schedule a review with our team.
Sources
- Utah Code Section 34A-5-114 — Limitations on enforceability of nondisclosure and non-disparagement clauses – Retaliation prohibited.
- Congress
FAQ
What states are NDAs not enforceable in?
No state bans NDAs outright. States including Utah, along with several others, have passed laws that make specific NDA provisions unenforceable when they attempt to silence discussion of sexual assault or sexual harassment, while leaving ordinary confidentiality agreements intact under Utah Code §34A-5-114.
Are non-compete agreements enforceable in Utah?
Utah generally enforces post-employment noncompete agreements only up to one year under the Post-Employment Restrictions Act. Confidentiality and nondisclosure agreements are excluded from that one-year cap, though a clause functioning as a disguised noncompete can still face separate legal challenge.
How legally enforceable are NDAs?
NDAs are generally enforceable contracts in Utah, particularly when they protect trade secrets or legitimate confidential business information under the Utah Uniform Trade Secrets Act. They become unenforceable to the extent they try to bar discussion of sexual assault or sexual harassment, under both Utah Code §34A-5-114 and the federal Speak Out Act.
Is Utah a non-disclosure state?
Utah allows and enforces nondisclosure agreements broadly, so it is not a state that bans NDAs. Since 2024, Utah Code §34A-5-114 carves out one specific exception: clauses cannot be used to prevent an employee from discussing sexual assault or sexual harassment.