Non-competition agreements and employees in Colorado

Non-competition agreements, also known as noncompete clauses, are becoming increasingly common, even for the most basic types of jobs. Although they were originally designed to protect businesses’ legitimate interests in avoiding unfair competition, their widespread use has created situations where employees who want to leave their jobs for legitimate reasons feel unable to do so because they fear legal action and retribution by their employers. The result is something many people refer to as “job lock” — a dysfunctional situation where hard-working, skilled employees are not free to offer their services to the employer of their choice, but are restrained because of the fear of litigation.

Fortunately, Colorado significantly restricts the scope and enforcement of non-competition agreements. Under Colorado law, non-competition agreements are void unless they fall into one of four narrowly defined exceptions:

1. a contract for the sale of a business,
2. a trade secrets contract,
3. a contract for the expense of training or educating an employee, and
4. agreements with high-level executives, managers, officers, and their staff.

Not only are these four exceptions the only ones in which Colorado courts will enforce noncompete agreements, but when interpreting these exceptions, Colorado courts have held that they are to be narrowly interpreted with an eye towards Colorado’s strong public policy disfavoring non-competition agreements. In practice, this means that noncompete agreements are very difficult for businesses to enforce in Colorado courts.

Defending your rights against non-compete clauses

Although the law is clearly stacked against employers who want to use the court systems to enforce non-competition agreements, unscrupulous employers often sue (or threaten to sue) employees knowing that the very threat of litigation can be enough to deter an employee from working for a competitor. Such threats are illegal under Colorado law, but the disparity in resources to defend against these claims can make it very difficult for employees to enforce their right to freely find work.

Employees looking for representation in a noncompete dispute or negotiation should look for a specialist who has a proven track record of defeating non-competition agreements in court. The Law Office of Paul Maxon has perfect record in defending against noncompete agreements – our last noncompete trial resulted in a verdict containing a significant financial award for our client against litigious employers misusing the court system to threaten employees. Please contact us today at 303.473.9999 if you would like assistance with a non-competition matter.