Are Non-Competes Enforceable in Colorado? (2026)

How Colorado Law Treats Non-Compete Agreements

Colorado starts from a simple position on non-compete agreements. Under C.R.S. § 8-2-113(2)(a), any covenant not to compete that restricts a person's right to receive compensation for performing labor for an employer is void unless it fits a listed exception.

That flips the usual assumption. The employer must show the agreement lands inside a narrow carve-out. The law also blocks a common workaround: a covenant covering a worker who primarily lived or worked in Colorado at termination cannot force that worker to fight over enforceability in another state, and Colorado law governs regardless of what the contract says.

Salary Thresholds That Decide if Your Non-Compete Applies

Pay is the first gate. A non-compete may survive only if the worker earns annualized cash compensation at or above the threshold amount for highly compensated workers, both when the covenant is signed and when it is enforced. Even then, it must protect trade secrets and stay no broader than reasonably necessary.

Non-solicitation clauses use a lower bar. A covenant not to solicit customers can apply to a worker earning at least sixty percent of that same threshold, again only when it reaches no further than needed to protect trade secrets.

The Division of Labor Standards and Statistics sets that threshold, and the figure that counts is the greater of the amount in place as of August 10, 2022, or the amount at signing. Annualized cash compensation covers salary, wages, fees or other pay.

Exceptions That Still Allow Non-Competes in Colorado

Four categories sit outside the ban entirely – the statute lists them:

• Recovery of training costs beyond normal on-the-job training, limited to reasonable amounts and shrinking month by month over the two years after training ends.
• A reasonable confidentiality provision that does not cover your general skill and experience, public information, or speech you have a legal right to make.
• A covenant tied to the purchase and sale of a business or its assets.
• Repayment of a scholarship if an apprentice fails to meet the scholarship terms.

Trade secrets sit at the center of the high-earner exception, and the term is defined broadly. Under C.R.S. § 7-74-102(4), a trade secret covers technical information, designs, processes, formulas, confidential business or financial information and customer lists that are secret and valuable – and the owner must have taken real steps to keep that information from spreading.

Physicians get their own rule. A non-compete restricting a doctor's right to practice medicine is void, though other terms may stand, including damages reasonably tied to the injury from termination. A departing physician may also tell patients with rare disorders where to find them.

Notice Rules an Employer Must Follow Before You Sign

Paperwork can sink an otherwise valid covenant. Even a non-compete that clears the pay and trade secret tests is void unless the employer gives proper written notice.

• A prospective worker must receive notice and the covenant's terms before accepting the job offer.
• A current worker must receive them at least fourteen days before the covenant takes effect, or before any raise or change in job terms that pays for the covenant, whichever comes first.
• The notice must be a separate document, written clearly in the language you and your employer use to discuss your performance, and signed by you.

It must also arrive with a copy of the agreement, name it, state plainly that it holds a covenant that could limit your future job options, and point to the exact sections. You may request one extra copy each year.

Penalties Employers Face for an Unlawful Non-Compete

Colorado does not just refuse to enforce void covenants – it punishes employers for using them. An employer may not enter into, present as a term of employment, or try to enforce a void covenant. Breaking that rule means liability for actual damages plus a penalty of $5,000 per worker or prospective worker harmed.

Workers and the attorney general may both sue for injunctive relief and penalties, and a private action can also recover reasonable costs and attorney fees. A court may reduce or waive the penalty if the employer acted in good faith. Using force, threats or intimidation to keep someone from a lawful job is a class 2 misdemeanor.

You do not have to wait to be sued. A worker bound by a non-compete, or a company considering hiring them, may ask a court or arbitrator to declare it unenforceable. Employers keep remedies for genuine trade secret theft, including injunctions, damages for actual loss, and criminal exposure under C.R.S. § 18-4-408.

Create Your Business Paperwork With ConsumerShield

Colorado's rules leave little room for sloppy drafting, and a covenant that misses the pay threshold or the notice steps can cost an employer real money. A template can save time and reduce the risk that you draft an invalid or unenforceable contract. For help with drafting yours, explore ConsumerShield's online tools and resources today.