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Are non competes enforceable in Colorado?
Asked on March 25, 2019 under Business Law, Colorado
SJZ, Member, New York Bar / FreeAdvice Contributing Attorney
Answered 1 year ago | Contributor
CO does not like non-competes and does not enforce all of them. But there are 4 categories or situations where they are enforceable:
1) In connection with the sale of a business (e.g. former owner agrees to not compete with buyer);
2) When it can be shown they are necessary to protect trade secrets (e.g. against someone who knows very valuable, proprietary information);
3) To recover the expense of employee training or educational classes when the employee was there for less than 2 years (so they don't take the education, training, etc. they were provided and immediately jump ship and use it elsewhere); or
4) against executive, managers, and certain professional staff (e.g. house counsel) to those executives or managers (on the theory that a) such staff are more likely to have damaging information and b) that such people are more sophisticated and better able to protect themselves, and so need less protection from the law).