Non-competition agreements can be part of an employment relationship when an employer wishes to protect certain business interests, like trade secrets. Also known as a non-compete agreement or a covenant not to compete a non-competition agreement can be a term of an employment contract, or it can exist as a stand-alone contract.
While the details of these agreements vary widely, Colorado law sets strict terms for when they are and are not enforceable. Understanding these terms and your rights under Colorado law can be important to protect ing your interests, as well as professional relationships when dealing with non-compete agreements.
The Denver Lawyers at Colorado Employee Rights have experienced employment law and contract attorneys who can help you with any aspect of non-competition agreements including non-solicitation agreements and confidentiality agreements. Diligent and resourceful. our lawyers are ready to explain how to protect your rights and interests with regard to a non-compete agreement. We are also ready to help you take the necessary action to resolve any legal issues arising from a non-compete agreement.
What Is a Non-Competition Agreement?
Non-compete agreements can be entered into during or after the hiring process. As such, these agreements may be used to:
- Prevent employees from sharing trade secrets with the competition
- Prohibit employees from working for a company's competitors when the employment relationship ends
- Restrict employees from soliciting or working with specific clients customers or employees
- Govern the relationship between two businesses involved in a transaction (like the sale/acquisition of a business or providing business-to-business services).
Colorado law generally presumes that non-competition agreements are unenforceable. They fit the requirements for being "reasonable" and fall within a legal exception as defined by the Colorado statute. In order to considered reasonable and valid a non-compete agreement must have a reasonable:
- Duration or end date - What is ·reasonable " can vary by situation. Generally, however, the duration should not inhibit an employee's right to earn a living or extend beyond a period after which the protected information is no longer valuable.
- Geographical scope - A non-compete agreement has to define the geographic limits within which working for a competitor would be prohibited. Fo r example (and depending on the circumstances), it may be reasonable to prohibit someone from working for a competitor in the same city or county(for a reasonable period of time); it may, however, be unreasonable to prevent someone from working fo r a competitor in another state or abroad.
- Scope of professional activity - In other words, a non-compete agreement cannot provide a blanket restriction prohibiting an employee from engaging in any or all professional activities related to an industry. The limits generally have to be specific without unreasonably restricting the professional from going on to earn a living after parting ways with the employer.
Please be aware that these not necessarily the only requirements that must apply in order for a non competition agreement to be enforceable. An attorney can provide you with more specific advice regarding all of the requirements necessary for valid enforceable non-compete agreements in Colorado.
When Are Non-Competition Agreements Unenfor ceab le in Colorado?
Any number of factors can render a non-compete agreement invalid and unenforceable. Some examples of th ese factors include:
- Either party failing to properly sign (execute) the agreement
- The agreement containing unreasonable (or no) terms related to the duration, geographic scope, and/ or scope of professional activity
- The reason why the employee is no longer working for the employer
- The employer enforcing its non-competition agreements inconsistently
- The agreement failing to protect a legitimate business interest
- The employer changing the nature of the employment relations hip
How Our Lawyers Can Help You with Non-Competition Agreements
When non-competition agreements arise in the course of employment or business operations, the Denver attorneys at Colorado Employee Advocates can provide essential help by:
- Reviewing and negotiating these agreements on your behalf, whether before you a resigning, during your employment. or after your termination
- Advising you about factors to consider when evaluating a non-compete agreement
- Aggressively protecting your interests in any disputes related to non-compete agreements
- Drafting valid non-compete agreements that fully comply with Colorado laws
We are experienced at representing employees, independent contractors, businesses, and other interested parties in all phases and aspects of non-compete agreements.