Colorado Non-Competition Agreements

Nov 03, 2017

By Craig T. Watrous:

Every Colorado business dreads the thought of losing a trusted, management or executive level employee to a competitor or to start their own competing business.  Havingcraig.jpg a well-drafted and enforceable non-compete agreement is an important method to limit the damage to your business from the loss of a key employee to a competing business.  

The former employee or his new employer will likely challenge the enforceability of the non-compete agreement. Historically such agreements were viewed as unlawful restraints on trade. Today, such agreements can be enforceable, but this will  depend on how the non-compete is drafted, especially regarding  the former employee’s duties and responsibilities and how the non-compete is designed to protect the company’s specific business interests.  Careful consideration of several factors is important to make the agreement more likely to hold up in court.  

Whether the non-compete is enforceable in Colorado will, in the first instance, depend on whether it falls within categories permitted under the Colorado statute, namely:

  • Restrictions contained in the sale of a business;
  • Protection of trade secrets;
  • Recovery of employee training or educational expenses; and,
  • Restrictions limited to “executive” and “management” personnel and their professional staff.

The non-compete restrictions must also be reasonable in their: 1) duration, and 2) geographic scope.  Determining the reasonableness of these two provisions depends on your business and industry, and it is often determined on a case-by-case basis. If a court determines that the restrictions are overreaching or unreasonable, the court may deny enforcement of a specific provision or the entire agreement.

Taking preventative measures to protect your company can reduce the risks of an ex-employee or a competitor unfairly using your sensitive business information, trade secrets, customer information and business plans in competition with your business. In follow-up posts, we will discuss enforcement of non-compete agreements as well as the very important use of confidentiality/non-disclosure and non-solicitation clauses in conjunction with a non-compete. Not only can the competition from a former employee seriously hurt your business, but the litigation expenses of trying to enforce a poorly drafted non-compete can be costly and time consuming, and might not be successful.  Having a well-drafted and enforceable non-competition agreement can help prevent these types of business disputes or quickly bring them to a conclusion. 

The attorneys at Mallon Lonnquist Morris & Watrous are experienced in drafting and enforcing non-competition, non-solicitation and non-disclosure agreements on behalf of Colorado employers.  Please contact us if you would like to speak with us about drafting or enforcing non-competes.


Related Posts:

Unraveling the Enforceability of Colorado Non-Solicitation Clauses

Enforcement of Colorado Non-Compete Agreements Against Executive and Management Personnel

Colorado Non-Competes in the Sale of Business

NYT – When the Guy Making Your Sandwich Has a Non-compete Clause

Craig T. Watrous is a Colorado business and real estate litigation attorney with Mallon Lonnquist Morris & Watrous, based in Denver, Colorado. Craig  remlmw_mark_MD_Transparent.jpggularly represents businesses and individuals in business transactions and disputes, from pre-filing through trial, and can be reached at cwatrous@mlmw-law.com.   




Category List

Tag List

News and Updates (15)
Construction Bond Claims (2)
CO Business Non-Solicitation Restrictions (1)
Overtime Wages (2)
Denver Broncos (1)
LLC Law (2)
Employment (4)
Snowboard Gear (1)
Denver Business Journal (2)
Arbitration (5)
Finance Law (2)
Data Breach (2)
Business Litigation (4)
Business Services (5)
Legal Services (1)
Helmet Recall (1)
Alternative Dispute Resolution (6)
Legal Updates (5)
Business Law (1)
Phantom Stock (1)
American Bar Association (2)
Research (1)
Certifiably Green Denver (1)
Real Estate (6)
cause for termination (1)
attorney-client privilege (2)
Taxes (1)
Real Estate Law Firm (3)
Colorado Courts (2)
Incentive Plans (1)
Resolutions (1)
Denver Sustainable Law Firm (1)
Colorado Real Estate (11)
Denver Business Law (1)
Ethics (1)
Wrongful Death Settlement (1)
ABA Article (1)
Property Surveys (1)
subcontractor negotiations (2)
indemnifications (3)
Leasing Standard (1)
Panelist (1)
Landlords (1)
Non-Competition Agreements (12)
Enforcing Non-Solicitation Agreement (1)
Mergers & Acquisitions (5)
Colorado attorney mentor (2)
Litigation (19)
Co-Ownership Agreement (1)
cyber security (3)
Commercial Real Estate (2)
Colorado business disputes (1)
Construction Contracts (5)
Colorado Enforcement of Non-Compete (2)
Denver Real Estate (1)
Business Disputes (8)
ADR (2)
Our Courts Colorado (1)
Master Services Agreement (2)
Colorado Employment (20)
Non-Compete, Colorado non-compete restrictions, enforcing non-compete, protecting Colorado business (1)
County Court (1)
Cherry Creek Chamber of Commerce (1)
Colorado Wrongful Death (1)
ABA (1)
Spanish Legal Services (10)
Non-Solicitation (1)
Lease Negotiations (1)
Colorado Retail Leasing (1)
Non-Disclosure (1)
Colorado Foundation for Water Education (1)
Denver Colorado Business Attorney (9)
Credit Card Data (1)
Non-Solicitiation (1)
Corporate Law (8)
Trade Secrets (6)
Colorado Judicial Institute (1)
Denver arbitration (1)
Data Breach Settlement (1)
Contracts (3)
Spanish Business Law (9)
Colorado Hispanic Bar Association (1)
Skiing Gear (1)
Business (5)
Reed Morris (1)
Labor (3)
Business Attorney (2)
CO Ski and Snowboard Gear Recall (1)
Leases (7)
Cell Tower Leases (1)
Mechanic's Liens (1)
Colorado at-will employment (1)
Colorado Business (56)
Community (33)
Construction (6)
Business Contracts (8)
Stock Options (1)
Colorado LLC (1)
Colorado Lis Pendens (1)
Spanish Speaking Lawyers Committee (3)
Non-Compete (2)
CO Attorney Mentoring Program (1)
courts (1)
Colorado Construction (1)
Commercial Property (2)
Mediation (1)
St. Anthony, Minnesota (1)
Resolving Business Disputes (1)
Breach of Contract (3)
Employment Law (1)
Landowners (1)
Colorado Spanish Legal Services (1)