Non-compete clauses are standard in employment and business contracts, often used to protect a company’s confidential information, trade secrets, or client relationships. However, in Colorado, these agreements are enforceable only under specific legal conditions. Understanding how and when a non-compete clause is valid is essential for both employers and employees.
At Reha Goodwin Caras, our firm guides clients through the legal standards that determine whether these clauses can be enforced.
A non-compete clause restricts an employee or former employee from joining or starting a competing business for a set period after leaving employment. Employers often use these clauses to protect trade secrets, confidential data, or client relationships. However, in Colorado, not every non-compete agreement can be enforced.
State law limits the enforceability of these clauses to specific circumstances, ensuring that employees can still pursue their careers freely while allowing employers to protect legitimate business interests.
If you are unsure whether a non-compete in your contract is valid, consulting with our business lawyer in Littleton can help clarify your rights and obligations.
Under Colorado Revised Statutes § 8-2-113, non-compete clauses are generally void unless they meet certain exceptions. The law was updated in 2022 to strengthen worker protections and set clearer standards for when such clauses may be used.
A non-compete clause in Colorado may only be enforceable if it:
For more information, you can review the official Colorado Revised Statutes § 8-2-113.
Colorado allows non-compete clauses only under specific legal exceptions. Employers must show a legitimate business reason, such as protecting trade secrets or the goodwill of a sold business.
The worker must meet Colorado’s minimum compensation requirement for “highly compensated workers.” This threshold is updated annually by the Colorado Department of Labor and Employment. The rule ensures that only senior or high-income employees can be subject to non-compete restrictions.
Speaking with our business law attorney in Littleton can help ensure your agreements comply with these compensation and notice rules.
Even if a valid exception and compensation threshold apply, the non-compete clause must still be reasonable in time, geography, and scope. Agreements that last one year or cover only the region where the employer operates are more likely to be upheld. Overly broad or indefinite clauses are typically void.
Employers should regularly review their contracts to ensure compliance with Colorado law. Outdated agreements or overly broad clauses can be declared invalid. When drafting a new non-compete, it is best to make the deal clear, limited, and focused on protecting legitimate interests such as trade secrets.
Our practice areas page outlines how our firm assists companies with business litigation, contract drafting, and asset protection. Working closely with a business attorney ensures your agreements are both enforceable and fair.
Employees should not assume that every non-compete agreement is valid. If you are asked to sign one, take time to read it carefully and understand what rights you may be giving up. Pay attention to whether your employer meets the required compensation threshold and whether the restriction is limited to reasonable terms.
If a non-compete clause prevents you from working in your field or forces you to relocate, you may have grounds to challenge it. Our attorney profile page provides details about our attorneys who can evaluate the validity of these agreements and protect your interests.
Seeking early advice from our business contract attorney can help you avoid costly disputes later on.
Disputes involving non-compete clauses can arise when an employee changes jobs or when a former employer accuses someone of violating their agreement. Colorado courts examine whether the restriction is reasonable and serves a legitimate purpose. If not, they may void or modify the clause.
Our firm has helped businesses and individuals resolve these disputes efficiently and fairly. You can explore related case outcomes by visiting our success stories page.
Non-compete clauses must balance business protection with an individual’s right to work. Understanding when they are enforceable helps both employers and employees make informed decisions. At Reha Goodwin Caras, we assist clients throughout Littleton and across Colorado with drafting, reviewing, and disputing non-compete agreements.
If you need guidance from an experienced legal team, our firm is ready to help safeguard your rights and interests. Contact us today to discuss your situation and ensure your agreements meet every legal requirement.
