Are non-compete agreements enforceable in Colorado?
1. Baseline Rule. C.R.S. § 8-2-113, as substantially rewritten by HB 22-1317 (effective August 10, 2022), voids non-competes except in narrow circumstances. Old covenants signed before that date are analyzed under the prior version of the statute.
2. Permitted Categories. Non-competes are permitted ONLY against (a) employees earning at least the "highly compensated worker" threshold (≥ $123,750/year in 2025, indexed by CDLE) AND the covenant is no broader than reasonably necessary to protect a trade secret; (b) recovery of education/training costs (capped at 2 years' amortization); (c) sale-of-business covenants; and (d) executive/management personnel above the threshold.
3. Customer Non-Solicitation. Customer non-solicits are permitted against employees earning at least 60% of the highly compensated threshold (~$74,250 in 2025) and only as needed to protect trade secrets.
4. Notice Requirements. Employers must provide notice of the covenant in a separate document, signed by the worker, before acceptance for new hires or at least 14 days before the effective date for incumbents.
5. Reasonableness Factors. Even when permitted, covenants must be reasonable in time, geography, and scope.
6. Blue Pencil / Reformation. Colorado courts may modify overbroad covenants to make them reasonable.
7. Physician Carve-Out. C.R.S. § 8-2-113(3) effectively bans physician non-competes — the only permissible remedy is damages for breach, and the physician may continue to treat patients with rare conditions.
8. Penalties. Violations are a Class 2 misdemeanor with $5,000 in damages plus actual damages and attorneys' fees for the worker.
9. FTC Rule. Enjoined nationwide by Ryan LLC v. FTC (E.D. Tex. Aug. 2024); on appeal.
10. Choice of Law. § 8-2-113(8) voids any choice-of-law or forum-selection clause that deprives a Colorado worker of statutory protections.
This is legal information, not legal advice.
- You earn below the highly compensated threshold and the employer seeks to enforce
- Employer used an out-of-state choice-of-law clause to evade § 8-2-113
- You are a physician with patients suffering rare conditions
- C.R.S. § 8-2-113 (as amended by HB 22-1317)
- C.R.S. § 8-2-113(3) (physician carve-out)
- Colorado Department of Labor and Employment INFO #8
This is legal information, not legal advice. Laws vary by jurisdiction and change frequently. Always verify current law with official sources and consult a licensed attorney in your jurisdiction for advice on your specific situation.