We wrote in January about a small change in Colorado law that could have large effects because it criminalized the enforcement of non-compete agreements that violate its general non-compete statute, C.R.S. § 8-2-113. Well, the Colorado General Assembly is at it again. Passed by the Colorado Senate on May 3, 2022, and now awaiting Governor Jared Polis’s signature, HB 22-1317 would further amend C.R.S. § 8-2-113 to substantially limit the enforceability of noncompetes and other restrictive covenants for any workers other than those who are “highly compensated,” as well as imposing new, stringent notice requirements and penalties for noncompliance. This has been a trend nationwide over the past several years with respect to noncompetes, but not other post-employment restrictive covenants. If signed (which Governor Jared Polis is expected to do), the law would go into effect this August, so employers must be ready. Here are the details:
Post-employment restrictive covenants are presumptively void unless certain conditions are satisfied. Any non-compete or non-solicitation provision executed by a Colorado worker is presumptively void unless the agreement is (a) with a “highly compensated” worker; (b) is for the protection of trade secrets, and (c) is no broader than is reasonably necessary to protect the employer’s legitimate interest in protecting its trade secrets. This is a departure from the previous exception under Colorado law for “executive and management personnel”...
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