Non-Compete Agreements in Colorado: What You Need to Know
A non-compete agreement is a legally binding contract between an employer and an employee that restricts the employee`s ability to work for a competitor within a certain time frame and geographical area after leaving the employer. In Colorado, non-compete agreements are enforceable under certain conditions.
Here are some key points you should know if you are considering or already have a non-compete agreement in Colorado:
1. The agreement must be reasonable in scope and duration.
For a non-compete agreement to be enforceable in Colorado, it must be reasonable in scope and duration. This means that it cannot be too broad or too long. The scope of the agreement should be limited to the specific job duties and industry of the employee, and the duration of the agreement should not be overly restrictive. Courts in Colorado will review non-compete agreements on a case-by-case basis to determine whether they are reasonable.
2. The agreement must be supported by consideration.
To be enforceable, a non-compete agreement in Colorado must be supported by consideration. This means that the employer must give the employee something in exchange for signing the agreement, such as a job offer, a promotion, or additional compensation. If the consideration is not sufficient, the agreement may be deemed unenforceable.
3. Non-compete agreements are not allowed for certain professions.
Non-compete agreements are not allowed for certain professions in Colorado, including doctors, lawyers, and psychologists. These professionals are exempt from non-compete agreements because they are considered essential to public welfare and safety.
4. Non-compete agreements may not be enforceable for low-wage workers.
Non-compete agreements may not be enforceable for low-wage workers in Colorado. In 2019, Colorado passed a law that prohibits employers from requiring low-wage workers to sign non-compete agreements. Low-wage workers are defined as those earning less than $13.50 per hour.
5. Employers can seek damages for breach of the agreement.
If an employee violates a non-compete agreement, the employer may seek damages for breach of the agreement. This may include lost profits, lost business opportunities, and other damages resulting from the employee`s competition with the employer.
In conclusion, non-compete agreements are enforceable in Colorado under certain conditions. If you are considering a non-compete agreement, it is important to make sure the agreement is reasonable in scope and duration, supported by adequate consideration, and compliant with applicable laws. If you have signed a non-compete agreement and are considering leaving your employer or working for a competitor, it is important to review the agreement with an attorney to fully understand your rights and obligations.