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Food For Thought - Article on Non-Competes

May 12, 2014

Food For Thought – Article on Non-Competition Agreements

By: Craig Watrous

In past blog posts, we’ve discussed the enforceability of covenants not to compete in Colorado (also called non-competition agreements or non-competes).  It’s an interesting, evolving area of law.  A covenant not to compete is an agreement that prohibits an entity or a person from competing with another person or entity for a set period of time within a certain geographical area.  Enforcement of non-competes is based on a number of factors including reasonableness, duration, geographical limitations, scope of the limitations, and state law.  In Colorado non-competes are void, except under limited circumstances.  Under such limited circumstances non-competes are absolutely enforceable in Colorado.  While there are specific legal parameters that must be carefully considered with any non-compete, there are also important business implications that business owners and execs must consider.

Jess Haden of Inc.com wrote an article discussing some of the business downsides of using non-competition agreements in the tech industry.  (“The Case Against Non-Compete Agreements”, Inc., November 19, 2013).  Though not a new article, the ideas presented therein are still relevant and present interesting food for thought. Rather than takes sides, I present the article for you to judge. 

For the full Inc. article please see the link below:

http://www.inc.com/jeff-haden/non-competes-could-cause-the-death-of-your-business.html 

(Mallon & Lonnquist, LLC, is a business, finance, real estate, and litigation law firm. Craig T. Watrous is a Colorado business attorney with Mallon & Lonnquist, based in Denver, Colorado. Craig regularly represents clients on both sides of covenants not to compete.)



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