unionstation.jpg

Colorado Non-Compete Agreements

Jan 19, 2016


Denver Skyline

COLORADO NON-COMPETITION AGREEMENTS

 

By: Craig 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.  Having 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/her 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 other posts on our blog, 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 MLMW 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.



Category: M&L Legal Posts

Category List


Tag List

Non-Disclosure (1)
CO Attorney Mentoring Program (1)
Finance Law (2)
Employment (3)
Co-Ownership Agreement (1)
Colorado Judicial Institute (1)
Trade Secrets (6)
CO Business Non-Solicitation Restrictions (1)
Certifiably Green Denver (1)
Skiing Gear (1)
LLC Law (2)
(31)
Litigation (15)
Non-Compete (2)
Colorado Construction (1)
Colorado at-will employment (1)
Credit Card Data (1)
Colorado Real Estate (11)
Community (28)
Colorado Lis Pendens (1)
Resolving Business Disputes (1)
Mechanic's Liens (1)
Spanish Legal Services (7)
Ethics (1)
courts (1)
Colorado Business (56)
Alternative Dispute Resolution (5)
St. Anthony, Minnesota (1)
Non-Competition Agreements (12)
Cherry Creek Chamber of Commerce (1)
Arbitration (2)
Our Courts Colorado (1)
Colorado Foundation for Water Education (1)
Colorado business disputes (1)
Denver Broncos (1)
Colorado Courts (1)
Colorado Hispanic Bar Association (1)
Real Estate Law Firm (3)
cyber security (3)
Construction (6)
Real Estate (4)
Lease Negotiations (1)
Data Breach Settlement (1)
CO Ski and Snowboard Gear Recall (1)
Business Contracts (1)
Construction Bond Claims (2)
Non-Compete, Colorado non-compete restrictions, enforcing non-compete, protecting Colorado business (1)
Wrongful Death Settlement (1)
Non-Solicitiation (1)
Spanish Business Law (9)
Colorado Wrongful Death (1)
Labor (3)
Snowboard Gear (1)
Helmet Recall (1)
cause for termination (1)
Colorado Enforcement of Non-Compete (2)
Denver arbitration (1)
Employment Law (1)
Leases (4)
Mergers & Acquisitions (5)
Property Surveys (1)
Colorado LLC (1)
Denver Sustainable Law Firm (1)
Overtime Wages (2)
Construction Contracts (5)
Commercial Real Estate (1)
Colorado Spanish Legal Services (1)
Data Breach (2)
Non-Solicitation (1)
Denver Colorado Business Attorney (9)
Corporate Law (8)
Colorado Employment (20)
Colorado Retail Leasing (1)
Commercial Property (1)
Enforcing Non-Solicitation Agreement (1)

Archive