This form is a Post-Employment Restrictions on Competition for use with exiting employees exposed to commercial trade secrets or other confidential information as part of their job. This form includes a Noncompetition Covenant as well as other relevant clauses, such as a Savings Clause, a Consulting Option, and an Assignment Clause, that can be integrated into any agreement with the former employee.
Colorado Post-Employment Restrictions on Competition, also known as non-compete agreements or covenants not to compete, are legal agreements that restrict an employee from engaging in competitive activities with a former employer after the termination of employment. These agreements aim to protect legitimate business interests, including trade secrets, confidential information, customer relationships, and specialized skills or knowledge. Under Colorado law, there are two types of post-employment restrictions on competition: non-compete agreements and non-solicitation agreements. A non-compete agreement prohibits a former employee from directly competing with their former employer within a certain geographic area and for a specific duration of time. This means that the employee cannot work for a competitor or start a similar business within the defined scope. Non-compete agreements must be in writing and signed by the employee, and they must also meet certain requirements to be enforceable. On the other hand, a non-solicitation agreement focuses on restricting the former employee's ability to solicit or contact the employer's customers or clients after leaving the company. This agreement may also cover non-recruitment of other employees or former co-workers. Non-solicitation agreements should also be in writing and must conspicuously state the employee's rights to post-employment employment. To be enforceable, both types of agreements in Colorado must meet certain criteria. They must be supported by consideration, meaning that the employee received something of value in exchange for signing the agreement, such as a job offer, promotion, or access to trade secrets. Additionally, the agreements must be reasonable in scope, duration, and geographic area. Colorado's law recognizes the importance of striking a balance between protecting legitimate business interests and employees' rights to seek new employment and opportunities. Therefore, excessive restrictions that unreasonably limit an employee's ability to earn a living may be deemed unenforceable by the courts. Courts will consider factors such as the nature of the business, the employee's position, the duration and geographic reach of the restrictions, and whether the employee received adequate consideration when determining enforceability. It is important for both employers and employees to understand the nuances of Colorado Post-Employment Restrictions on Competition to ensure compliance with the law. Consulting with an employment attorney can provide individuals with guidance and help in drafting or reviewing such agreements to ensure they are enforceable and protect their interests.
