Colorado Governor Jared Polis signed HB 22-1317 into law on June 8, 2022. The new law significantly limits the enforceability of non-compete agreements executed after August 10, 2022 — the law’s effective date — for employers with employees working or living in Colorado.

(For details of the new law, see our article, Colorado Poised to Further Limit Use of Non-Compete Agreements, Raise Penalties for Non-Compliance.)

Here are several questions and answers for employers to consider before the law becomes effective:

Q: Before the August 10 effective date, should employers execute new non-compete agreements with employees who currently do not have non-compete agreements?

A: The new non-compete law is not retroactive, i.e., the enforceability of any existing non-compete agreements, or non-compete agreements that are executed prior to August 10, will be assessed by the current, more relaxed standard. Some employers may decide to avail themselves of current law and expedite the non-compete execution process with employees not currently subject to such restrictions. Employers should take care to review their agreements to ensure that the restrictions are enforceable under current Colorado law.

Q: How should employers handle existing non-compete agreements with employees?

A: Non-compete agreements that were executed before August 10 will not be affected by the new statute. Employers should review the language of existing non-compete agreements to ensure that they do not require...

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