Non-Compete and Employment Contract Disputes in Colorado

When a non-compete agreement, non-solicitation clause, or other restrictive covenant is limiting your career options in Colorado, the enforceability question is the only one that matters. Colorado law changed significantly in 2022, and many agreements signed before or shortly after those changes are unenforceable under the current statute. Getting an assessment from a non-compete agreement attorney in Colorado who understands the post-2022 framework is the starting point for employees and professionals evaluating what their options actually are.

At Elkus & Sisson, P.C., our Colorado employment law attorneys represent employees and professionals navigating non-compete and restrictive covenant disputes. We evaluate agreements under current Colorado law, identify enforceability defects, advise on strategic options, and pursue available remedies through litigation and negotiation when warranted.

What the 2022 Changes to Colorado Non-Compete Law Actually Mean

Colorado restructured its non-compete statute in 2022 through House Bill 22-1317 and Senate Bill 22-074, effective August 10, 2022.^[1] The result is two separate statutory provisions: C.R.S. § 8-2-113.3 governing non-compete agreements and C.R.S. § 8-2-113.5 governing non-solicitation agreements, each with distinct income thresholds, employer obligations, and enforcement rules. An agreement written under the prior statute is not automatically valid under the current one.

Income thresholds

A non-compete agreement is only permissible for employees earning above an annual threshold that adjusts with inflation. As of 2024, that threshold is $123,750 per year for non-compete agreements. Non-solicitation agreements have a lower threshold of $74,250 per year. If the employee earned below the applicable threshold at the time of signing, the agreement is void regardless of its other terms.

Advance written notice

Employers must provide written notice of the non-compete or non-solicitation agreement before a prospective employee accepts a job offer or, for an existing employee, at least 14 days before the agreement takes effect. The employee must acknowledge receipt. An agreement presented without this advance notice has a procedural defect that exists independently of whether the substantive terms are reasonable.

Colorado-only venue

Any dispute involving a non-compete or non-solicitation agreement for an employee who primarily lives and works in Colorado must be adjudicated in Colorado. A contractual forum-selection clause designating another state is void and unenforceable against a Colorado worker.

Employee private right of action

If an employer presents, enters into, or attempts to enforce a non-compete or non-solicitation agreement that does not comply with the current statute, the employee can bring a private civil action. Remedies include actual damages, a penalty of $5,000 per violation (or the employee’s actual damages if greater), and attorney fees. This provision did not exist under prior law.

Non-Compete Agreements: What Makes Them Enforceable

Even when the income threshold is met and the notice requirement was satisfied, a non-compete must clear additional requirements before a court will enforce it.

The agreement must protect a legitimate business interest. Colorado recognizes two: 

• Trade secrets covered by the Colorado Uniform Trade Secrets Act (C.R.S. § 7-74-101 et seq.) ^[2] 
• Specialized professional or technical training the employer provided that has market value. Protecting client relationships or general competitive advantage alone is not sufficient.

The restriction must also be reasonable in duration, geographic scope, and the range of restricted activities. Colorado courts have historically voided overbroad agreements rather than reforming them. A court has the statutory authority to reform an overbroad covenant, but it exercises that authority narrowly. National geographic scope, multi-year terms without connection to specific trade secrets, or blanket industry restrictions are systematically vulnerable.

Physician non-compete agreements are subject to additional statutory restrictions. Colorado’s 2022 law created specific rules for physicians that limit enforceability and address patient care continuity in ways the general non-compete provisions do not.

Non-Solicitation Agreements: A Separate Statute, a Lower Threshold

Non-solicitation agreements are governed by their own statute (C.R.S. § 8-2-113.5)^[3] with a lower income threshold than non-compete agreements. A worker earning above the non-solicitation threshold but below the non-compete threshold can be bound by a customer non-solicitation covenant but not by a full competitive restriction.

A non-solicitation agreement dispute frequently turns on characterization. Colorado courts hold that an employer cannot evade the non-compete statute by labeling a restriction as a non-solicitation agreement when the practical effect is to prevent the employee from working in the same field. The substance of the restriction, not its label, determines which statute applies.

For employees bound by a non-solicitation clause, the threshold and notice requirements of § 8-2-113.5 apply just as they do for non-competes. A non-solicitation agreement presented without advance written notice, or to an employee below the applicable income threshold, is void under the same logic that voids a non-compete under those same conditions.

Confidentiality Agreements and NDAs: When Restrictive Covenants Fall Outside the Non-Compete Statute

Confidentiality agreements and non-disclosure agreements (NDAs) protect trade secrets and proprietary information without restricting where an employee can work or which clients they can serve. Colorado’s non-compete statute does not apply to these agreements in the same way it applies to non-compete and non-solicitation covenants, which means the income threshold and advance notice requirements that can void a non-compete do not automatically void an NDA.

That distinction matters for employees in two situations. 

• First, if an NDA is drafted so broadly that it functionally prevents the employee from working in their field, courts can evaluate whether it operates as a disguised non-compete subject to the statute’s requirements. 
• Second, an employer cannot use an NDA to protect information that does not meet the definition of a trade secret under the Colorado Uniform Trade Secrets Act. A confidentiality agreement covering ordinary business information that is available to competitors or not actively protected is overbroad even without triggering the non-compete statute.

Employees who signed multiple documents at onboarding, during employment, or at termination often find that a package includes a non-compete, a non-solicitation clause, and a separate confidentiality agreement. The enforceability of each is evaluated independently. A void non-compete does not automatically void an otherwise valid NDA, and a valid NDA does not validate a non-compete that fails the statutory requirements.

Restrictive Covenants in Severance and Separation Agreements

For many professionals and executives, the most consequential non-compete or non-solicitation clause is not one signed at the start of employment. It appears in a severance or separation agreement presented at termination, combined with a release of employment claims and a deadline to sign.

The same statutory framework applies. A restrictive covenant in a severance agreement that fails the income threshold or advance notice requirements is void under current Colorado law, even if the employer presents it as part of a broader separation package. The consideration offered in the severance does not independently make a defective covenant enforceable.

Several issues arise specifically in the separation agreement context:

• The 14-day advance notice requirement is clearest when a covenant is presented before employment begins or during employment; its application to agreements presented at termination involves timing questions that should be evaluated on the specific facts. 
• Additionally, when an employee is being asked to release claims, the scope of what is released can interact with the enforceability of the restrictive covenant in ways that require careful review before signing.

For a full analysis of what to look for in a Colorado separation package, see our detailed overview of what Colorado employees should know before signing a severance agreement, which addresses how restrictive covenants interact with release language and compensation terms in these agreements.

Strategic Options for Employees Facing a Non-Compete

Once the threshold and notice questions are resolved, employees facing a potentially unenforceable agreement have three distinct paths. The right choice depends on whether the employer has acted, what the employment situation is, and what competitive activity is at issue.

• Proactive challenge before the employer moves. An employee who identifies a likely void agreement can bring a declaratory action in Colorado court seeking a ruling that the covenant is unenforceable. Under the 2022 statute, if the employer presented or required the employee to sign an agreement that did not comply with the statute, the employee can also bring a private civil action for damages, penalties, and attorney fees. Getting ahead of enforcement is not always the right move, but it is a strategic option that shifts leverage before the employer can seek an injunction.
• Negotiation at signing or at separation. Employees who understand the statutory framework before signing have the most leverage. An employer aware that an agreement is likely void under the income or notice rules may be willing to narrow its scope, reduce its duration, or provide additional consideration in exchange for a covenant the employee will actually honor. In the severance context, the restrictive covenant terms are often the most negotiable element of the package.
• Defense when the employer moves first. Employers who discover alleged breach often seek a temporary restraining order or preliminary injunction. These proceedings move quickly; courts can schedule a hearing within days of filing. A court evaluating an injunction request will assess whether the employer is likely to succeed on the merits, whether irreparable harm exists, and how the hardships balance between the parties. If the covenant is void under the 2022 statute, the employer’s likelihood of success on the merits is undermined from the start.

Filing Deadlines for Non-Compete Disputes in Colorado

Non-compete disputes are civil contract claims in Colorado. The statute of limitations for written contracts is generally three years (C.R.S. § 13-80-101).^[4] An employer seeking to enforce a non-compete typically must file suit within three years of the alleged breach. An employee bringing a private right of action for an employer’s unlawful presentation or enforcement of a void covenant generally has three years from the date the employer presented or attempted to enforce the offending agreement.

Where the non-compete dispute also involves other employment claims such as discrimination, retaliation, or wrongful termination, separate and shorter deadlines apply. An employee generally has 300 days to file a charge with the Colorado Civil Rights Division or the Equal Employment Opportunity Commission. Missing that deadline bars those claims permanently. If the dispute involves unpaid wages or commissions, the Colorado Wage Act’s limitations periods apply independently.

When an employer seeks an injunction, the response timeline compresses sharply. A temporary restraining order application may be decided within days. Acting promptly on receiving a demand letter or a complaint is essential to preserving all available defenses and remedies.

What to Weigh Before Any Agreement Is Signed

Non-compete enforceability in Colorado now turns on facts your employer may hope you never check: your income at signing, whether they gave you advance notice, and how broadly the restriction is drawn.

• The income question comes first. If you earned below the applicable annual threshold when you signed, the agreement is void regardless of what it says or how the employer characterizes it. An employment contract lawyer in Denver will check your compensation at the signing date before anything else.
• The notice failure is the most overlooked defect. Colorado requires written advance notice before a job offer or 14 days before enforcement against an existing employee. A restrictive covenant attorney in Colorado will check whether that process was followed before evaluating any other enforceability question.
• Scope overbreadth has consequences beyond unenforceability. Under the 2022 statute, an employer who presents or enforces a void agreement can face a civil claim from the employee: actual damages, a $5,000 statutory penalty, and attorney fees. That remedy was not available under prior law.
• Strategic decisions split into three paths. Employees can challenge proactively with a declaratory action, negotiate the scope before signing or at separation, or wait and defend if the employer moves first. Which path fits depends on the employment situation and the employer’s enforcement history.

The 2022 law gave employees tools that did not exist before. Whether any of them apply depends on the specific agreement, the timing of signing, and how the employer has acted since.

Get a Clear Read on Your Agreement Under Current Colorado Law

Non-compete and restrictive covenant disputes in Colorado now involve a post-2022 statutory framework that most agreements were not written to comply with. The income thresholds, notice requirements, venue rules, and employee enforcement rights under current law create more options than most employees realize. Elkus & Sisson, P.C. represents employees and professionals at our Colorado office locations in employment law matters including non-compete disputes, restrictive covenant challenges, severance agreement review, and wrongful termination.

If you have questions about a non-compete or employment contract dispute in Colorado, contact us or call +1 303-567-7981 to schedule a confidential consultation.