Simply put, non-compete agreements are contractual agreements that generally provide for individuals not to compete with their employer while they are employed and for a period of time after leaving the company. Even the sandwich company, Jimmy John’s, has been under fire for its broad non-competes for its low-level employees including sandwich makers and delivery drivers not to compete with any restaurant that sells sandwiches for two years.
Generally speaking, all states require non-competes to be “reasonable” to be valid, but some states go even further. California considers almost all non-competes to be invalid by default, which some claim sparked the economic boom in Silicon Valley by fostering competition.
Here in Colorado under C.R.S. § 8-2-113, non-competes must fit within four particular exceptions to be upheld in court as valid and enforceable.
These specific exceptions include:
- Contracts for the purchase and sale of a business or its assets
- Contracts for the protection of trade secrets
- Contracts providing for the recovery of education and training expenses of an employee who has served an employer for less than two years
- Executive and management personnel and officers and employees who constitute professional staff to executive and management personnel
If the non-compete does not fit within one of these statutory exceptions, then it is not considered to be valid in the State of Colorado. However, even if it may appear to fit within an exception, there are still fact-specific considerations and other reasonableness concerns as to the specific applicability and terms of the agreement that need be considered. So before you have your employees sign a non-compete or think about starting your own business when you have already signed a non-compete, be sure to speak with a knowledgeable attorney first to find out more about its enforceability.
Even if it looks like it would be considered unenforceable by the courts, there is always some level of risk in taking it to court. Additionally, there is a lot of time, money, and stress involved in that process, so it may still be a good idea to wait out the agreement or even try negotiating a settlement between you and the company. With these other considerations in mind, the importance of discussing the options with an experienced attorney is even more vital.
If you would like help in drafting or reviewing a non-compete for you, reach out to the Law Office of E.C. Lewis, P.C., home of your Denver business attorney, Elizabeth Lewis at 720-258-6647 or by email at firstname.lastname@example.org.