Non-compete Clause
(CO)

Summary

This is an employee non-compete clause (also known as a non-competition clause or covenant not to compete) intended for use in an agreement that is subject to Colorado law. This clause includes practical guidance, drafting notes, and alternate and optional clauses. A traditional non-compete prohibits competing activities by an employee, typically for a specified period and often within a designated geographical area. Such covenants raise restraint-of-trade and other public policy concerns, and many states restrict their use by statute or common law. By Colorado statute, restrictive covenants, including non-compete provisions, are void unless they fall under one of the following exceptions: • Involves an employee who makes more than the threshold for highly compensated workers, established by the state of Colorado; • Protects trade secrets –and– • Is only broad enough to reasonably protect the trade secrets of the Company Colo. Rev. Stat. § 8-2-113(2). For additional restrictions for physicians, see Colo. Rev. Stat. § 8-2-113(3). See the drafting notes for additional state law guidance and other matters. For a full listing of key content covering restrictive covenant considerations, see Restrictive Covenants Resource Kit. For additional boilerplate provisions to consider when incorporating a non-compete into an agreement, see Non-compete, Customer and Employee Non-solicitation, and Confidentiality Agreement (CO). For information on non-compete provisions in Colorado, see Restrictive Covenants (CO) and Colorado Employment Law § 19.4 et seq. For additional information on non-competition agreements, see Non-compete Agreements: Key Negotiation, Drafting, and Legal Issues; Non-compete Agreements Checklist (Best Drafting Practices for Employers); Restrictive Covenant Basics, Including Adequate Consideration, Protectable Interests, Geographic and Time Restrictions, and Permissible Scope; Restrictive Covenants: Drafting Common Provisions; and Non-compete and Non-solicitation Agreements Checklist (Addressing Suspected Violations). For information on state laws concerning non-compete agreements, see Non-competes and Trade Secret Protection State Practice Notes Chart. For state law compliant non-compete agreements, see Non-competes and Trade Secret Protection State Expert Forms Chart.