Colorado treats non-compete agreements with deep skepticism. State law renders the vast majority of them unenforceable, even when both parties have signed. For higher earners, the rules work differently. Understanding where those lines fall matters for both employees and employers.
The general rule: non-competes are void
Colorado law treats any non-compete that limits a worker’s right to earn a living as void by default. In August 2022, the state tightened those rules further. It narrowed the already limited exceptions and added real penalties for employers who push non-competes on workers who do not qualify.
How the salary threshold works
As of January 1, 2026, the salary threshold for an enforceable non-compete in Colorado is $130,014 annually for highly compensated workers. That figure is adjusted each year through the CDLE’s PAY CALC Order. A lower threshold applies to non-solicitation agreements, set at 60% of that amount. The salary requirement applies both when the employee signs and when the employer tries to enforce it. If the employee’s pay has since dropped below the current threshold, the employer cannot rely on an older agreement.
Salary is only part of the test
Meeting the salary threshold is not enough on its own. The agreement must also protect legitimate trade secrets and go no further than necessary to do so. The 2022 amendments replaced the old “executive and management” exception with the current salary-based test for highly compensated workers. A high salary without real trade secret exposure gives an employer no legal grounds to restrict where a worker goes next.
Notice requirements and penalties
Employers must give workers advance written notice of any non-compete in a separate document, not buried in a larger agreement. Breaking these rules can expose employers to $5,000 in penalties per affected worker, injunctive relief, actual damages and attorney fees. Using force, threats or intimidation to enforce a non-compete is a Class 2 misdemeanor in Colorado. Standard civil enforcement of a void agreement typically results in those statutory penalties rather than criminal charges.
Three checks before relying on a non-compete
Higher earners with non-competes should check three things: whether the agreement meets the current salary threshold, whether it targets actual trade secrets and whether the employer followed proper notice rules. Any one of those gaps can make the restriction unenforceable. Colorado has made clear that non-competes are the exception, not the rule. The more an agreement overreaches, the less likely it is to hold up.