Non-Compete Agreement in Colorado
State-specific overview · Employment Law
Colorado voids most non-competes unless they protect legitimate business interests and are reasonable in scope, duration, and geography.
How Colorado treats Non-Compete Agreement
Colorado Statute § 8-2-113 makes non-compete agreements unenforceable unless the employer can prove the restriction protects a legitimate business interest (trade secrets, confidential information, substantial relationships, or goodwill). The agreement must be reasonable in time, area, and line of business. Courts rarely enforce non-competes lasting longer than two years. Colorado strongly disfavors these restrictions and interprets them narrowly against the employer.
The general definition of Non-Compete Agreement
A contract clause restricting an employee from working for competitors or starting a competing business after leaving.
A non-compete agreement is a contract between an employer and employee that prevents the employee from working for a competitor or starting a competing business for a set period after leaving the job. These agreements are designed to protect the employer's trade secrets and customer relationships. However, courts scrutinize them carefully because they restrict a person's right to earn a living. A non-compete is generally enforceable only if it is reasonable in scope (limited to a specific geographic area and time period) and protects a legitimate business interest. Some states, like California, disfavor non-competes entirely.
Read the full Non-Compete Agreement entry →This page is a plain-English reference and is not legal advice. State laws change frequently. For specific situations consult a licensed attorney in Colorado.