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.
Restrictive Covenants (CO)
Colorado Senate Passes Non-Compete Bill to Further Limit Use of Agreements and Increase Non-Compliance Penalties
The Colorado Senate recently passed House Bill 22-1317 which, if enacted into law, would significantly limit the enforceability of any non-compete agreements executed after the law’s effective date for employers with employees working or living in Colorado. If Governor Polis signs the proposed legislation, it could go into effect as
Colorado Overhauls Noncompete Law to Limit Enforcement to High Wage Earners, Impose Penalties for Employer Violations
Colorado has enacted the most significant change to its legal landscape concerning restrictive covenants in the employment context in the state’s history.
Colorado Poised to Further Limit Use of Non-Compete Agreements, Raise Penalties for Non-Compliance
On May 3, 2022, the Colorado Senate passed House Bill 22-1317 which, if enacted into law, would significantly limit the enforceability of any non-compete agreements executed after the law’s effective date for employers with employees working or living in Colorado.
Colorado Court Decides Issue of First Impression on Restrictive Covenants
The Colorado Court of Appeals recently decided an issue of first impression regarding noncompetition and nonsolicitation agreements. The decision in 23 LTD v. Herman highlights an important consideration for Colorado restrictive covenants: it is the parties’ job to craft narrow agreements, and they cannot count on the courts to step in and rescue an otherwise overbroad agreement.
Colorado Supreme Court Rules Continued Employment Is Sufficient Consideration For Restrictive Covenant
Reversing a state court of appeals’ decision, the Colorado Supreme Court has held that an employer’s continued employment of a current at-will employee provides sufficient consideration for a non-competition agreement entered into after the inception of employment. Lucht’s Concrete Pumping, Inc. v. Horner, 09SC627 (Colo. May 31, 2011). The ruling will impact Colorado employers’ decision about how and when to implement non-competition agreements.
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