Colorado noncompete law starts from the position that a noncompete is void. Under C.R.S. 8-2-113, an agreement restricting your right to work for a competitor after you leave a job is unenforceable unless it fits one of a few narrow statutory exceptions, and each exception carries its own requirements around pay, purpose, scope, and written notice.1Justia. Colorado Code 8-2-113 – Unlawful to Intimidate Worker – Agreement Not to Compete – Prohibition – Exceptions – Notice – Rules – Definitions Since August 10, 2022, the rules have been stricter still, with salary thresholds replacing the old job-title exceptions and real financial penalties for employers who use illegal noncompetes.
Void by Default
Colorado’s starting point is blunt. Any covenant not to compete that restricts a person’s right to earn a living from any employer is void.1Justia. Colorado Code 8-2-113 – Unlawful to Intimidate Worker – Agreement Not to Compete – Prohibition – Exceptions – Notice – Rules – Definitions There’s no reasonableness balancing test to weigh the employer’s interests against yours. Either the agreement fits a statutory exception, or it’s dead. Employers can’t save a noncompliant noncompete by pointing out that you signed it voluntarily or arguing that the restriction seems fair.
When a Noncompete Can Actually Be Enforced
Before 2022, the exceptions turned on job titles, allowing noncompetes for “executive and management personnel” and their professional staff. HB22-1317 scrapped that framework and put a compensation floor in its place.2Colorado General Assembly. HB22-1317 Restrictive Employment Agreements Three conditions must all be true for a noncompete to be enforceable:
- You earn annualized cash compensation at or above the highly compensated worker (HCW) threshold set each year by the Colorado Department of Labor and Employment. For 2026, that threshold is $130,014. You must meet it both when you sign the agreement and when the employer tries to enforce it.3Colorado Department of Labor and Employment. 2026 PAY CALC Order 7 CCR 1103-14
- The noncompete exists to protect trade secrets. A general interest in blocking competition doesn’t qualify.
- The restriction is no broader than reasonably necessary to protect those trade secrets.1Justia. Colorado Code 8-2-113 – Unlawful to Intimidate Worker – Agreement Not to Compete – Prohibition – Exceptions – Notice – Rules – Definitions
Miss any one of the three, and the agreement is void. A worker earning $200,000 who signs a noncompete unrelated to trade secrets still has a void agreement. Because the HCW threshold adjusts annually with inflation, a covenant that was enforceable one year can slip out of range the next if pay doesn’t keep up.
Nonsolicitation Agreements Have a Lower Threshold
Colorado treats nonsolicitation agreements, which restrict a former employee from reaching out to the employer’s customers, as a lighter restraint than a full noncompete. The salary floor for enforcing one is 60% of the HCW threshold.1Justia. Colorado Code 8-2-113 – Unlawful to Intimidate Worker – Agreement Not to Compete – Prohibition – Exceptions – Notice – Rules – Definitions For 2026, that means $78,008.40. The nonsolicitation covenant still has to protect trade secrets and stay no broader than reasonably necessary. Employers who apply the wrong threshold, dropping a full noncompete on someone earning $80,000, end up with a void agreement and potential liability.
Agreements That Skip the Salary Threshold
A few kinds of restrictive covenants sit outside the compensation-threshold framework entirely. Each carries its own conditions.
Sale of a Business
When a business, an ownership interest, or substantially all of a business’s assets are sold, the seller can agree not to compete with the buyer. For minority owners who received their equity as compensation tied to their work, the statute limits how long the noncompete can last. The duration formula is the total sale consideration divided by the individual’s average annualized compensation over the preceding two years, or their entire tenure if shorter.1Justia. Colorado Code 8-2-113 – Unlawful to Intimidate Worker – Agreement Not to Compete – Prohibition – Exceptions – Notice – Rules – Definitions That prevents employers from locking low-equity workers into disproportionately long restrictions.
Training Expense Recovery
Employers can require repayment of training costs when the training is distinct from normal on-the-job instruction. Repayment is capped at reasonable costs and must decline proportionally over the two years following the training, so leaving one year in cuts the employer’s recovery to roughly half.1Justia. Colorado Code 8-2-113 – Unlawful to Intimidate Worker – Agreement Not to Compete – Prohibition – Exceptions – Notice – Rules – Definitions Public employers get a longer window. Repayment also can’t violate federal wage-and-hour law or Colorado’s own wage protections, so deductions that would push you below minimum wage are off-limits.
Confidentiality Provisions
Nondisclosure agreements are treated separately from noncompetes and don’t have to clear the HCW threshold. A confidentiality provision cannot prohibit you from disclosing three categories of information: anything readily available to the public, anything you have a legal right to disclose (such as workplace safety concerns or wage information), and anything that amounts to your general knowledge, training, or skills gained on the job. A confidentiality clause that reaches into those areas risks being treated as an illegal restraint on employment.
Notice Requirements
Even a noncompete that fits a statutory exception can be killed by defective notice. This is the procedural trap where most otherwise-valid noncompetes die.
For a prospective employee, the employer must provide notice of the noncompete and its terms before you accept the job offer. For a current employee, the notice must arrive at least fourteen days before the covenant takes effect or before you receive whatever additional compensation serves as consideration for signing.1Justia. Colorado Code 8-2-113 – Unlawful to Intimidate Worker – Agreement Not to Compete – Prohibition – Exceptions – Notice – Rules – Definitions
The notice itself must meet several format requirements. It has to be delivered as a separate document, apart from other covenants between the worker and employer. It must be written clearly and conspicuously in the language you and the employer actually use to communicate about job performance. It has to identify the agreement by name, state that it contains a noncompete that could restrict future employment, and point you to the exact sections containing the restriction. And you have to sign the notice.1Justia. Colorado Code 8-2-113 – Unlawful to Intimidate Worker – Agreement Not to Compete – Prohibition – Exceptions – Notice – Rules – Definitions
Failure to follow these rules renders the noncompete void, even if the agreement satisfies every other statutory condition. Employers who slip a noncompete into page fourteen of a general employment handbook, or who hand you the agreement on your first day with no advance warning, have a void covenant.
What an Illegal Noncompete Costs the Employer
Before 2022, the main consequence for an illegal noncompete was that a court would void it. No fine, no damages, no meaningful deterrent. An employer could paper every new hire with noncompetes and the worst-case scenario was losing the restriction, which put all the litigation risk on workers who had to challenge them.
The 2022 amendments changed the math. An employer who enters into, presents, or attempts to enforce a void noncompete is liable for a penalty of $5,000 per worker or prospective worker harmed, plus actual damages. Workers can also recover reasonable costs and attorney fees in a private lawsuit.1Justia. Colorado Code 8-2-113 – Unlawful to Intimidate Worker – Agreement Not to Compete – Prohibition – Exceptions – Notice – Rules – Definitions The attorney general can bring enforcement actions and seek injunctive relief. For training repayment violations, the attorney general can recover three times what the employer tried to collect.
There is one safety valve for employers. If they can show the violation was committed in good faith with reasonable grounds for believing their conduct was legal, the court has discretion to reduce or eliminate the $5,000 penalty.1Justia. Colorado Code 8-2-113 – Unlawful to Intimidate Worker – Agreement Not to Compete – Prohibition – Exceptions – Notice – Rules – Definitions Discretionary reduction, not automatic defense. Actual damages and attorney fees remain available regardless.
The attorney fee provision reshapes the practical economics. Under the old rules, a worker earning $70,000 might spend $30,000 in legal fees just to void an agreement threatened against them. Now, a successful challenge can shift those costs to the employer, which makes workers much more willing to fight.
How Courts Handle Overbroad Agreements
When a noncompete clears the statutory threshold but reaches too far, covering too large a geographic area or lasting too long, the question is whether the court will trim it down or throw it out.
Colorado courts have discretion to “blue pencil” overbroad restrictive covenants, meaning they can narrow the geographic scope, shorten the duration, or limit the subject matter to bring the agreement within legal bounds. But this is discretion, not an obligation. Colorado courts have explicitly held that they are not required to rewrite a poorly drafted agreement, and that the employer bears the responsibility to draft covenants that comply with the law in the first place. A court that declines to blue pencil an overbroad agreement is not abusing its discretion.
That matters for employers who write aggressive noncompetes assuming a court will fix them. Some states essentially guarantee judicial reformation. Colorado’s approach is deliberately less forgiving, and an employer who gambles on a broad covenant may lose the entire restriction rather than getting a tailored version.
Geographic Reasonableness
The statute doesn’t define what geographic scope is “reasonable,” and courts evaluate this case by case. The general principle is that the restriction should match the employer’s actual competitive footprint. Barring a former retail manager from working at a competing store within a few miles of their old location looks very different from barring them across multiple states. Courts consider the nature of the business, the worker’s role, and how far the employer’s trade secrets realistically extend.
Duration
Courts are similarly skeptical of long time restrictions. Agreements stretching beyond one or two years face increasing scrutiny, and the employer bears the burden of justifying why a longer restriction is necessary to protect trade secrets. A six-month noncompete tied to a specific client list is far easier to defend than a three-year ban on an entire line of work.
Federal Rules Don’t Override the Colorado Statute
For a brief window, it looked like federal law might override state noncompete rules. In April 2024, the Federal Trade Commission issued a final rule that would have banned most noncompetes nationwide. That rule never took effect. A federal court in Texas blocked it, finding the FTC lacked authority to issue such a sweeping regulation. In September 2025, the FTC formally abandoned its appeal and accepted the rule’s vacatur.4Federal Trade Commission. Federal Trade Commission Files to Accede to Vacatur of Non-Compete Clause Rule
With the blanket federal ban dead, noncompete law remains a state-by-state question. The FTC has shifted to case-by-case enforcement actions against individual employers under existing antitrust authority. For Colorado workers and employers, the state statute is the governing framework, and it will remain so for the foreseeable future.