A Colorado law that took effect in August 2022 substantially changes what is permissible for non-compete and non-solicitation employment agreements. Currently, Colorado allows employers to require noncompete agreements for, among other things, (1) the sale of assets of a business, (2) the protection of trade secrets with limited duration and geographic scope, and (3) executive and management personnel, officers, and professional staff to executive and management personnel. House Bill 22-1317, signed in July, will effectively eliminate all non-compete agreements, except for those applying to highly compensated employees (earning $101,250/year) or more, if the non-compete is for the protection of trade secrets and is no broader than reasonably necessary to protect trade secrets. Customer non-solicitation agreements will also be void, except those entered into by a person who earns at least 60% of the threshold for highly compensated workers ($60,750/year), and again only if the covenant is no broader than reasonably necessary to protect the employer’s trade secrets. These new standards will apply to agreements entered into or renewed on or after the effective date of the law. Employers will not be required to amend existing agreements, but Colorado courts will likely not enforce non-competes that violate the new law against their departing employees. Non-compete covenants can include reasonable confidentiality provisions relevant to the employer’s business, so long as they do not prohibit disclosure of information arising from general training, experience, Continued on page 18 September • October 2022 17
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