Many people in Colorado will one day choose to leave their employer to move on to a different job that better utilizes their skills and talents. Since employers have a legitimate interest in ensuring that the skills and knowledge the worker gained in their employment are not used by competitors, they may ask employees to sign a non-compete agreement before resigning. There are some ways, however, that a non-compete agreement can be deemed invalid.
When is a non-compete agreement invalid?
It is against Colorado law for employers to use force, threats or intimidation to keep a worker from seeking employment at any place they see fit. A non-compete agreement that restricts the right of a worker to be paid for employment under any employer is void. There are, however, exceptions to this rule.
When is a non-compete agreement valid?
There are a variety of situations in which a non-compete agreement is legal in Colorado. One is a contract for the purchase and sale of business assets or the business itself. Another is a contract that protects trade secrets. A third is a contract that allows for the recovery of educational expenses and training when a worker was in the employer’s employment for under two years. Finally, an exception exists for executive and management personnel and officers who workers constitute professional staff to management.
Exception for doctors
A non-compete agreement cannot restrict a physician’s right to practice medicine. However, other provisions in a non-compete agreement can be enforced including those regarding the payment of damages related to the reason for terminating the non-compete agreement.
Learn more about non-compete agreements
So, while in general Colorado law on non-compete agreements is strict there are always exceptions to the rule. This post is for informational purposes only and does not contain legal advice. Our firm’s webpage on non-compete agreements may be a good starting point for those who want to learn more about this topic.