§ 1. Governing Statutory & Common Law Authority
The enforceability of non-competition agreements in Colorado is governed by C.R.S. § 8-2-113 (amended 2022). Non-competes void unless the employee earns above $130,014/year (2026). Must be for protection of trade secrets. Workers earning below the threshold cannot be bound.
Recent legislative developments: 2022 overhaul established salary thresholds. 2026 threshold is $130,014 (up from $123,750 in 2025). Criminal penalties for employers who violate the statute.
§ 2. Compensation Threshold Requirements
Colorado imposes a statutory compensation threshold for non-compete enforcement. Under current law, non-compete covenants are presumptively void for employees earning below the statutory minimum. 2026 threshold; adjusted annually. Applies to non-competes. Non-solicitation threshold is $65,007. The threshold is $130,014/year — but whether your total compensation qualifies depends on how your state counts bonuses, commissions, and equity.
§ 3. Temporal Limitations on Post-Employment Restrictions
Colorado does not codify a maximum duration. No statutory maximum, but must be reasonable. In practice, 1-2 years is generally considered the outer limit of reasonableness, though outcomes vary significantly based on the employee's role and access to trade secrets.
§ 4. Judicial Modification (Reformation Doctrine)
Colorado follows the reformation doctrine, granting courts broad authority to rewrite overbroad non-compete terms. This is the most employer-favorable approach — even a poorly drafted agreement may be reshaped into an enforceable restriction.
§ 5. Statutory Exemptions & Carve-Outs
Colorado law exempts certain workers from non-compete enforcement:
- Workers earning below threshold
- Healthcare workers (28+ professions)
§ 6. Consideration & Contract Formation
Notice of the non-compete terms must be provided to the employee before the start of employment or at least 14 days before the effective date. Whether this is legally sufficient — especially for agreements presented mid-employment rather than at hiring — is frequently contested.
§ 7. Effect of Involuntary Termination
Enforceability weakened if employee was terminated without cause. Courts may apply heightened scrutiny when the employer initiated the termination, particularly for termination without cause or mass layoffs.
Practitioner Notes
One of the most restrictive states. Criminal penalties (not just civil) for non-compliant agreements.