In Colorado, most non-compete agreements are void and unenforceable by law. Under Colorado Revised Statutes section 8-2-113, as substantially rewritten by House Bill 22-1317 (effective August 10, 2022), a covenant that restricts a worker from competing or earning a living is presumptively illegal unless it fits one of a few narrow statutory exceptions. The two main exceptions both require the worker to earn high wages: a non-compete is only allowed to protect trade secrets when the worker is a "highly compensated worker," and a customer non-solicitation clause is only allowed when the worker earns at least 60% of that highly compensated threshold. If you are a low- or middle-wage Colorado worker, a non-compete your employer asks you to sign is almost certainly unenforceable, and trying to enforce one against you can expose the employer to penalties.
Colorado's Default Rule: Non-Competes Are Void
Colorado starts from the opposite presumption of many states. Rather than asking whether a non-compete is "reasonable," Colorado law declares that covenants not to compete are void as a matter of public policy unless they fall within an express exception in the statute. This makes Colorado one of the most worker-protective states in the country on this issue, alongside states like California, Oklahoma, North Dakota, and Minnesota.
There is no nationwide federal ban on non-competes. The Federal Trade Commission issued a rule in 2024 that would have banned most non-competes, but a federal court set that rule aside before it took effect, so non-compete enforceability remains governed by state law. That is why your rights depend heavily on which state's law applies, and Colorado's law is among the strongest.
The Earnings Thresholds That Make or Break a Clause
The two exceptions that most workers encounter both turn on how much you earn:
- Trade-secret non-competes: Allowed only for a "highly compensated worker" whose annualized earnings meet or exceed a threshold set each year by the Colorado Department of Labor and Employment.
- Customer non-solicitation: Allowed only for a worker who earns at least 60% of the highly compensated threshold.
These dollar figures are adjusted annually for inflation by the state, so you should always confirm the current numbers. As of 2025 the highly compensated worker threshold was approximately $127,091 per year, with the 60% non-solicitation threshold at roughly $76,255. Because these figures change every January, do not rely on a prior year's number; confirm the figure for the current year directly with the Colorado Department of Labor and Employment's Division of Labor Standards and Statistics before assuming a clause is valid. The earnings test is applied both at the time the agreement is signed and at the time the employer tries to enforce it, so a worker whose pay later falls below the line gains protection.
Even when an employee clears the earnings threshold, the restriction must still be no broader than reasonably necessary to protect a legitimate trade secret. A clause that sweeps in general skills, customer goodwill, or routine know-how is not saved just because the worker is highly paid.
The Notice Requirement
House Bill 22-1317 added a strict notice rule that is easy for employers to violate. The employer must give the worker a separate, written notice of the covenant, identifying the agreement by name and stating that it contains a non-compete that could restrict the worker's options. The timing matters:
- For a new hire, the notice must be provided before the worker accepts the job offer.
- For a current employee, the notice must be provided at least 14 days before the earlier of the effective date of the agreement or the date of any additional consideration (such as a raise or bonus) tied to it.
If the employer skips this notice, the covenant is not enforceable even if you are highly compensated.
Other Statutory Exceptions
Beyond the high-earner exceptions, Colorado law continues to recognize a small set of permitted covenants:
- Sale of a business: A non-compete tied to the purchase and sale of a business or its assets can be enforceable against the seller.
- Recovery of training expenses: A narrow provision allowing recovery of certain documented training costs is permitted, but it cannot operate as a penalty and is tightly limited.
- Confidentiality and trade-secret agreements: Ordinary non-disclosure agreements that protect genuine trade secrets remain valid; the statute targets restrictions on competing and soliciting, not legitimate confidentiality.
Physicians get special protection. Colorado has long barred non-competes that prevent a physician from practicing medicine. A physician may be liable for damages in some cases, but cannot be stopped from continuing to treat or inform patients who have a rare disorder.