Colorado Rev. Statutes-Title 8-Article 2. Labor Relations, Generally
(1) Legislative intent. The general assembly intends to preserve existing state and federal case law in effect before August 10, 2022, that:
(a) Defines what counts as a covenant not to compete that is prohibited by this section; and
(b) Specifies the extent to which a covenant not to compete for the protection of trade secrets must be tailored in scope in order to be enforceable under this section.
(1.5)
(a) It is unlawful to use force, threats, or other means of intimidation to prevent any person from engaging in any lawful occupation at any place the person sees fit.
(b) A person who violates this subsection (1.5) commits a class 2 misdemeanor, as defined in section 18-1.3-501.
(2)
(a) Except as provided in subsections (2)(b), 2(d), and (3) of this section, a covenant not to compete that restricts the right of an individual to receive compensation for performance of labor is void.
(b) Except for a covenant not to compete that restricts the practice of medicine, the practice of advanced practice registered nursing, or the practice of dentistry in this state, this subsection (2) does not apply to a covenant not to compete governing an individual who, at the time the covenant not to compete is entered into and at the time it is enforced, earns an amount of annualized cash compensation equivalent to or greater than the threshold amount for highly compensated workers, if the covenant not to compete is for the protection of trade secrets and is no broader than is reasonably necessary to protect the employer’s legitimate interest in protecting trade secrets.
(c) As used in this section, unless the context otherwise requires:
(I) “Annualized cash compensation” means:
(A) The amount of the gross salary or wage amount, the fee amount, or the other compensation amount for the full year, if the individual was employed or engaged for a full year;
(B) The compensation that the individual would have earned, based on the worker’s gross salary or wage amount, fee, or other compensation if the worker was not employed or engaged for a full year.
(I.3) “Health-care provider” means an individual licensed to engage in the practice of medicine, registered to engage in the practice of advanced practice registered nursing, licensed to practice as a certified midwife, or licensed to engage in the practice of dentistry.
(I.4) “Practice as a certified midwife” has the meaning set forth in section 12-255-104(7.5).
(I.5) “Practice of advanced practice registered nursing” has the meaning set forth in section 12-255-104(8).
(I.6) “Practice of dentistry” has the same meaning as “dentistry” set forth in section 12-220-104(6).
(I.7) “Practice of medicine” has the meaning set forth in section 12-240-107(1) and includes practice as a physician assistant pursuant to section 12-240-113.
(II) “Threshold amount for highly compensated workers” means the greater of the threshold amount for highly compensated workers as determined by the division of labor standards and statistics in the department of labor and employment:
(A) As of August 10, 2022; or
(B) At the time the covenant not to compete is executed by the parties.
(III) In determining whether a worker’s cash compensation exceeds the threshold amount, where the worker has been employed for less than a calendar year, the worker’s cash compensation exceeds the threshold amount if the worker would reasonably expect to earn more than the threshold amount during a calendar year of employment.
(d) Except for a covenant not to compete that restricts the practice of medicine, the practice of advanced practice registered nursing, or the practice of dentistry in this state, this subsection (2) does not apply to a covenant not to solicit customers governing an individual who, at the time the covenant is entered into and at the time it is enforced, earns an amount of annualized cash compensation equivalent to or greater than sixty percent of the threshold amount for highly compensated workers if the nonsolicitation covenant is no broader than reasonably necessary to protect the employer’s legitimate interest in protecting trade secrets.
(3) The following covenants are not prohibited by subsection (2) of this section:
(a) A provision providing for an employer’s recovery of the expense of educating and training a worker where the training is distinct from normal, on-the-job training and satisfies any other requirements established by the attorney general, by rule, regarding the transferability of the training or credentialing that is available to the employee as a result of the training. The employer’s recovery is limited to the reasonable costs of the training and decreases over the course of the two years subsequent to the training proportionately based on the number of months that have passed since the completion of the training, and the employer recovering for the costs of the training would not violate the federal “Fair Labor Standards Act of 1938”, 29 U.S.C. sec. 201 et seq., or 8; except that a public employer’s recovery of the costs of the training may decrease over a period longer than two years.
(b) A reasonable confidentiality provision or trade secret provision relevant to the employer’s business that does not prohibit disclosure of information that arises from the worker’s general training, knowledge, skill, or experience, whether gained on the job or otherwise, information that is readily ascertainable to the public, or information that a worker otherwise has a right to disclose as legally protected conduct;
(c) A covenant not to compete related to the purchase and sale of a business, a direct or indirect ownership share in a business, or all or substantially all of the assets of a business that restricts competition by an owner of an interest in the business. for an individual who owns a minority ownership share of the business and who received their ownership share in the business as equity compensation or otherwise in connection with services rendered, the duration in years of a covenant not to compete described in this subsection (3)(c) must not exceed a number calculated by the total consideration received by the individual from the sale divided by the average annualized cash compensation received by the individual from the business, including income received on account of their ownership interest during the preceding two years or during the period of time that the individual was affiliated with the business, whichever period of time is shorter.
(d) A provision requiring the repayment of a scholarship provided to an individual working in an apprenticeship if the individual fails to comply with the conditions of the scholarship agreement.
(4)
(a) Any covenant not to compete that is otherwise permissible under subsection (2) or (3) of this section is void unless notice of the covenant not to compete and the terms of the covenant not to compete are provided to:
(I) A prospective worker before the worker accepts the employer’s offer of employment; or
(II) A current worker at least fourteen days before the earlier of:
(A) The effective date of the covenant; or
(B) The effective date of any additional compensation or change in the terms or conditions of employment that provides consideration for the covenant.
(b) An employer shall provide the notice required in subsection (4)(a) of this section in a separate document from any other covenants between the worker and employer and in clear and conspicuous terms in the language in which the worker and employer communicate about the worker’s performance. The notice must be signed by the worker.
(c)
(I) A worker may request an additional copy of the covenant not to compete required by this subsection (4) once each calendar year.
(II) An employer is not required under this subsection (4) to provide the worker with an additional copy of the covenant not to compete more than once during a calendar year.
(d) An employer satisfies the notice requirement of this subsection (4) when the notice:
(I) Is provided with a copy of the agreement containing the covenant not to compete;
(II) Identifies the agreement by name and states that the agreement contains a covenant not to compete that could restrict the workers’ options for subsequent employment following their separation from the employer; and
(III) Directs the worker to the specific sections or paragraphs of the agreement that contain the covenant not to compete.
(5) A provision of an employment agreement or any other agreement enforceable at law that does not include an unlawful restrictive covenant remains enforceable and subject to any damages or equitable remedy otherwise available at law.
(5.5) A covenant is deemed a covenant that restricts the practice of medicine, the practice of advanced practice registered nursing, or the practice of dentistry if it prohibits or materially restricts a health-care provider from disclosing to a patient to whom the health-care provider was providing consultation or treatment before the health-care provider’s departure from a medical or dental practice the following information:
(a) the health-care provider’s continuing practice of medicine;
(b) the health-care provider’s new professional contact information; or
(c) the patient’s right to choose a health-care provider.
(6) A covenant not to compete that applies to a worker who, at the time of termination of employment, primarily resided or worked in Colorado may not require the worker to adjudicate the enforceability of the covenant outside of Colorado. Notwithstanding any contractual provision to the contrary, Colorado law governs the enforceability of a covenant not to compete for a worker who, at the time of termination of employment, primarily resided and worked in Colorado.
(7) A worker who is a party to a covenant not to compete, or a subsequent employer that has hired or is considering hiring the worker, may seek a declaratory judgment from a court of competent jurisdiction or an arbitrator that the covenant not to compete is unenforceable.
(8)
(a) An employer shall not enter into, present to a worker or prospective worker as a term of employment, or attempt to enforce any covenant that is void under this section.
(b) An employer that violates subsection (8)(a) of this section is liable for actual damages and a penalty of five thousand dollars per worker or prospective worker harmed by the conduct. The attorney general and any worker or prospective worker harmed by an employer’s conduct may bring an action for injunctive relief and to recover penalties. The attorney general may recover three times the amount of any recovery or attempted recovery by an employer in violation of subsection (3)(a) of this section. In addition to injunctive relief and the penalty allowed in this subsection (8)(b), a worker or prospective worker may recover actual damages, reasonable costs, and attorney fees in any private action brought under this section.
(c) In any action brought under this subsection (8), if the employer shows that the act or omission giving rise to such action was in good faith and that the employer had reasonable grounds for believing that the employer’s act or omission was not a violation of this section, the court may, in its sound discretion, award the worker or workers no penalty or award a penalty of any amount not to exceed the amount specified in subsection (8)(b) of this section.
(d) Where the attorney general has brought an action under subsection (2), (3), (4), (6), or (8)(a) of this section and has recovered actual damages, penalties, or injunctive relief pursuant to subsection (8)(b) of this section, a worker or prospective worker is precluded from recovering the actual damages, penalties, or injunctive relief that was recovered in the attorney general’s action.
(9)
(a) The attorney general may enforce subsections (2), (3), (4), (5.5), (6), and (8)(a) of this section.
(b) The attorney general may promulgate rules necessary to implement and enforce subsection (3)(a) of this section.
This statute was amended in 2024 by https://leg.colorado.gov/bills/sb25-083 (2025).