How to Enforce Non-Compete Agreements in Colorado Under the New Strict Laws (C.R.S. § 8-2-113)

Protecting your company's trade secrets and client lists is vital for any business owner in Colorado. In the past, companies routinely forced all employees to sign non-compete agreements. However, Colorado has recently implemented some of the most aggressive and strict non-compete laws in the United States. Today, enforcing a restrictive covenant against a former employee in cities like Denver, Boulder, or Fort Collins requires navigating a minefield of complex legal regulations.

If you are a business owner attempting to enforce a non-compete, or drafting new employment contracts, you cannot rely on outdated templates. We strongly encourage you to use our US Lawyers directory to find an experienced Colorado employment attorney. A local lawyer will ensure your agreements comply with state law, preventing you from facing severe financial penalties for using an illegal contract.

The Strict Rules of Colorado Non-Compete Laws

According to C.R.S. § 8-2-113, non-compete agreements in Colorado are presumptively void and unenforceable. This means that, by default, the state allows employees to leave your company and work for a direct competitor. To overcome this presumption and enforce a non-compete, an employer must prove that the agreement fits into very narrow, specific exceptions.

Salary Thresholds and Strict Notice Requirements

The most significant hurdle for Colorado employers is the salary threshold. The Colorado Department of Labor and Employment, Denver establishes an annual compensation threshold under the PAY CALC Order pursuant to C.R.S. § 8-2-113(2). Generally, a non-compete is only valid if the worker is a "highly compensated employee" earning at least $130,014 annually. Customer non-solicitation agreements (preventing the poaching of clients) require compensation of at least 60% of that threshold ($78,008.40 annually).

Furthermore, the notice requirements under C.R.S. § 8-2-113(4)(a) are incredibly strict. Employers must provide a separate, written notice with the terms of the covenant. For prospective workers, this notice must be provided before the worker accepts the offer of employment. For existing employees, the notice must be delivered at least 14 days before the covenant takes effect or before any change in employment conditions or compensation. Failing to meet these exact timing requirements renders the non-compete void and exposes the employer to statutory penalties under C.R.S. § 8-2-113(8)(b).

Enforcing Non-Competes Across Specific Professions

Because the law heavily restricts who can be bound by a non-compete, enforcement strategies change depending on the employee's role within your company.

Tech Executives and Software Developers

Tech hubs like Boulder and Denver are fiercely competitive. Tech executives generally meet the highly compensated salary thresholds. For these roles, courts may enforce a non-compete if you can prove it is reasonably necessary to protect actual "trade secrets." You cannot restrict a developer merely because they have general coding skills. Your attorney must prove that the executive possesses confidential algorithms, upcoming product roadmaps, or specific proprietary data that would unfairly benefit a competitor.

Sales Representatives on Commission

Enforcing a non-compete against a sales representative is particularly difficult in Colorado. Because their compensation fluctuates based on commissions, proving they consistently meet the CDLE salary threshold can be challenging. Instead of a broad non-compete, employers often have better success enforcing a "non-solicitation" agreement. This allows the salesperson to work for a competitor, but strictly forbids them from contacting the specific clients they managed while working for you.

Physicians and Medical Staff

Colorado law specifically addresses health-care providers under C.R.S. § 8-2-113(5). Following statutory updates enacted under Colo. SB 25-083, non-compete agreements and patient non-solicitation covenants for licensed health-care professionals-including physicians, physician assistants, APRNs, and dentists-are entirely void regardless of income. Crucially, employers can no longer enforce liquidated damages or competition-related damage provisions against departing practitioners, nor can they restrict providers from notifying patients of their new practice location.

Independent Contractors

Trying to enforce a non-compete on an independent contractor (1099 worker) is highly scrutinized in Colorado. If you exercise too much control over a contractor, the Colorado Department of Labor and Employment, Denver may reclassify them as an employee. While non-disclosure agreements (NDAs) are generally enforceable for contractors to protect trade secrets, broad non-competes restricting their ability to find other freelance work are almost always void.

How Much Does Litigation Cost & Timelines?

If a former employee violates a valid non-compete, you may need to file a lawsuit in a state District Court, such as the Denver District Court, Denver or Arapahoe County District Court, Centennial. You will typically ask the judge for a Temporary Restraining Order (TRO) using an emergency motion, which can sometimes be granted within a few days or weeks.

Be warned: if you try to enforce an illegal or non-compliant non-compete, Colorado law allows the employee to counter-sue you. You could be forced to pay a $5,000 penalty per worker, plus all of the employee's legal fees.

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