Under Colorado non-compete law, most non-compete agreements are void. Since August 10, 2022, an employer can only enforce one against you if you earn above an annually adjusted salary threshold, the agreement protects actual trade secrets and is no broader than necessary, and you received a specific written notice before signing. Violating employers face a $5,000 penalty per worker, your actual damages, your attorney fees, and potential criminal liability.
Which Agreements the Current Rules Govern
The 2022 amendments to C.R.S. § 8-2-113 apply to every non-compete or non-solicitation agreement signed or renewed after August 10, 2022. Agreements signed before that date are governed by prior Colorado case law, which the statute expressly preserves.1Justia Law. Colorado Revised Statutes 8-2-113 – Unlawful to Intimidate Worker – Agreement Not to Compete – Prohibition – Exceptions – Notice – Rules – Definitions If your employer later handed you an updated employment agreement or asked you to re-sign a handbook with restrictive language, that renewal pulls your situation under the current law even if your original contract predates it.
The statute protects anyone who primarily lives or works in Colorado at the time their employment ends, regardless of where the employer is based or where the contract was signed. A choice-of-law clause pointing to another state, or a forum-selection clause requiring you to litigate elsewhere, is unenforceable.1Justia Law. Colorado Revised Statutes 8-2-113 – Unlawful to Intimidate Worker – Agreement Not to Compete – Prohibition – Exceptions – Notice – Rules – Definitions Out-of-state employers often try to route disputes through friendlier jurisdictions. In Colorado, that tactic doesn’t work.
The Salary Threshold for Non-Competes
A non-compete is only enforceable against a worker who qualifies as “highly compensated” under thresholds the Colorado Division of Labor Standards and Statistics adjusts each year. For 2026, that threshold is $130,014 in annualized cash compensation.2Colorado Department of Labor and Employment. Publication and Yearly Calculation of Adjusted Labor Compensation Earn less than that, even slightly, and any non-compete provision in your contract is void.
Annualized cash compensation means your gross salary, wages, fees, or other regular pay projected over a full year. For workers employed less than a year, the calculation uses the established rate.1Justia Law. Colorado Revised Statutes 8-2-113 – Unlawful to Intimidate Worker – Agreement Not to Compete – Prohibition – Exceptions – Notice – Rules – Definitions Employers sometimes try to count one-time bonuses, equity grants, or insurance premiums to push a worker over the line; those additions are a common tripping point.
Clearing the salary bar isn’t enough on its own. The non-compete must also protect trade secrets and be no broader than reasonably necessary to serve that purpose.1Justia Law. Colorado Revised Statutes 8-2-113 – Unlawful to Intimidate Worker – Agreement Not to Compete – Prohibition – Exceptions – Notice – Rules – Definitions An employer cannot impose a non-compete on a highly paid worker just because they can. The restriction must tie to real proprietary information, and its geographic reach and time span must stay proportional to that interest.
Because the threshold resets every January, an agreement that was valid when signed can become unenforceable later. You have to meet the threshold both when you sign and when the employer tries to enforce.
Customer Non-Solicitation Has a Lower Threshold
Agreements restricting a departing worker from soliciting the employer’s existing customers carry a lower income requirement. You must earn at least 60 percent of the highly compensated threshold, which for 2026 is $78,008.40 in annualized cash compensation.2Colorado Department of Labor and Employment. Publication and Yearly Calculation of Adjusted Labor Compensation Below that, the customer non-solicitation clause is void from the start.
The reasonableness and trade-secret requirements still apply. The restriction can be no broader than reasonably necessary to protect trade secrets.1Justia Law. Colorado Revised Statutes 8-2-113 – Unlawful to Intimidate Worker – Agreement Not to Compete – Prohibition – Exceptions – Notice – Rules – Definitions In practice, employers need to show the worker had meaningful exposure to proprietary client information, not just general customer contact.
Healthcare Providers Are Exempt Entirely
If you are a physician, advanced practice registered nurse, or dentist, SB 25-083 removed you from the highly compensated worker exemption as of August 6, 2025. No non-compete or practice-restricting non-solicitation covenant can bind you in Colorado, regardless of what you earn.3Colorado General Assembly. SB25-083 Limitations on Restrictive Employment Agreements
The law also voids any agreement that prevents you from telling current patients three things when you leave a practice: that you will continue practicing, where you can be reached, and that the patient has the right to choose any provider. Employers cannot repackage these restrictions as trade secret protections or customer non-solicitation clauses to work around the ban.
The Notice Requirement That Trips Up Employers
Even an agreement that meets every substantive test is void if the employer skipped the notice rules. These procedural requirements void more agreements than the salary thresholds do.
For a new hire, notice must reach you before you accept the job offer. For a current employee, notice must come at least 14 days before the covenant or any new compensation tied to it takes effect.1Justia Law. Colorado Revised Statutes 8-2-113 – Unlawful to Intimidate Worker – Agreement Not to Compete – Prohibition – Exceptions – Notice – Rules – Definitions Miss either deadline and the agreement fails.
The notice has to be a separate document from the employment agreement and any other covenants. It must be written in clear, conspicuous terms using the language the employer and worker normally use to discuss performance, and you must sign it.1Justia Law. Colorado Revised Statutes 8-2-113 – Unlawful to Intimidate Worker – Agreement Not to Compete – Prohibition – Exceptions – Notice – Rules – Definitions Burying a non-compete in a long handbook or standard offer letter does not count.
The notice itself must include a copy of the agreement that contains the covenant, identify that agreement by name, state that it contains a provision restricting your future employment options, and direct you to the specific sections where the covenant appears.1Justia Law. Colorado Revised Statutes 8-2-113 – Unlawful to Intimidate Worker – Agreement Not to Compete – Prohibition – Exceptions – Notice – Rules – Definitions These look like box-checking requirements until an employer fails one and a court throws the whole covenant out.
Training Repayment and Confidentiality Are Separate Categories
Two kinds of agreements sit outside the general non-compete ban and don’t follow the salary rules above.
Training reimbursement is allowed, with limits. The training must be distinct from normal on-the-job instruction, and it must meet any requirements the Colorado Attorney General sets regarding the transferability of the resulting credentials. Recovery is capped at reasonable costs, and the amount owed must decrease proportionally over two years from the date you completed the training. Twelve months in, the employer can recover at most half.1Justia Law. Colorado Revised Statutes 8-2-113 – Unlawful to Intimidate Worker – Agreement Not to Compete – Prohibition – Exceptions – Notice – Rules – Definitions A repayment provision also cannot violate the federal Fair Labor Standards Act or Colorado wage laws, meaning it cannot effectively drop your pay below minimum wage.
Confidentiality agreements protecting trade secrets are enforceable against any worker, regardless of salary. The information has to actually qualify as a trade secret under the Colorado Uniform Trade Secrets Act: it must be secret, derive value from being secret, and the owner must have taken reasonable steps to keep it that way.4Justia Law. Colorado Code 7-74-102 – Definitions General industry knowledge, skills you built on the job, and publicly available information don’t qualify, and an employer cannot convert ordinary information into a trade secret just by labeling it one.
What an Employer Faces for Violating the Law
An employer who enters into, presents as a condition of employment, or tries to enforce a void non-compete owes a $5,000 statutory penalty per worker harmed. You can also recover your actual damages, reasonable costs, and attorney fees in a private lawsuit. The Colorado Attorney General has independent enforcement authority and can seek treble damages when an employer improperly collects on a void training reimbursement.1Justia Law. Colorado Revised Statutes 8-2-113 – Unlawful to Intimidate Worker – Agreement Not to Compete – Prohibition – Exceptions – Notice – Rules – Definitions
The attorney fees provision is what makes the law practical for individual workers. Without it, few people would challenge a void non-compete, because legal costs would swamp the $5,000 penalty. Fee-shifting lets an attorney take the case knowing the employer pays the bill if you win.
There is a limited good-faith defense. An employer that genuinely and reasonably believed the agreement was lawful can ask the court to reduce the penalty or waive it entirely.1Justia Law. Colorado Revised Statutes 8-2-113 – Unlawful to Intimidate Worker – Agreement Not to Compete – Prohibition – Exceptions – Notice – Rules – Definitions The employer carries the burden of proof, and simple ignorance of the law isn’t enough.
Violating the statute is also a class 2 misdemeanor, with a maximum of 120 days in jail, a fine of up to $750, or both.5Justia Law. Colorado Revised Statutes 18-1.3-501 – Penalties Criminal prosecution for non-compete violations remains uncommon, but the classification is on the books, and it operates independently of the civil remedies. The same conduct can produce both a misdemeanor charge and a civil judgment.