Colorado Non-Compete Agreement Template
Build a non-compete that satisfies Colorado's restrictive-covenant statute (C.R.S. § 8-2-113), which voids covenants for workers below the highly compensated threshold (about $130,000 in 2026) and requires specific written notice.
AI-generated draft for review. Not legal advice. Starting at $19.
Legal Requirements in Colorado
A non-compete is only enforceable against a worker who meets or exceeds the highly compensated employee threshold, projected at $130,014 for 2026, and must be for the protection of trade secrets (C.R.S. § 8-2-113(2)).
Customer non-solicitation covenants require earnings of at least 60% of the highly compensated threshold (about $78,008 in 2026) (C.R.S. § 8-2-113(2)(b)).
The employer must provide separate, clear-and-conspicuous written notice of the covenant in the language used to communicate about the worker's job duties, signed by the worker (C.R.S. § 8-2-113(4)).
Notice must be given before a prospective worker accepts the offer, or at least 14 days before the effective date for a current worker (C.R.S. § 8-2-113(4)(b)).
The covenant must be no broader than reasonably necessary to protect the employer's legitimate interest in protecting trade secrets (C.R.S. § 8-2-113(2)(b)).
Key Statutes & Regulations
- C.R.S. § 8-2-113 (Unlawful to intimidate worker; restrictive employment agreements; as amended through 2025)
- C.R.S. § 8-2-113(2) (highly compensated threshold; trade-secret limitation)
- C.R.S. § 8-2-113(4) (separate signed notice and timing requirements)
- C.R.S. § 8-2-113(8) ($5,000-per-worker civil penalty; choice-of-law protection)
- Colorado SB 25-083 (2025) (amendments to sale-of-business and health-care provider provisions, effective Aug. 6, 2025)
Common Pitfalls
- •Imposing a non-compete on a worker who earns below the highly compensated threshold, making it void and exposing the employer to penalties.
- •Burying the covenant inside an offer letter instead of providing the required separate, signed notice document.
- •Giving a current employee less than 14 days' notice before the covenant takes effect.
- •Drafting an overbroad restraint untethered to protecting trade secrets, which Colorado does not permit.
Local Terminology
- Highly compensated employee
- A worker earning at or above the annual threshold set by the Colorado Division of Labor Standards, projected at $130,014 for 2026; only such workers may be bound by a non-compete.
- Restrictive employment agreement
- Any covenant restraining trade, including non-competes and non-solicits, governed by C.R.S. § 8-2-113.
- Separate notice
- A stand-alone, clear-and-conspicuous, signed document, required by statute, informing the worker that the agreement contains a covenant not to compete.
- Trade secret protection
- The narrow legitimate purpose that a Colorado non-compete must serve to be enforceable.
How Colorado Differs
Colorado voids covenants below an inflation-adjusted income threshold and, separately, ties enforceability to trade-secret protection rather than general goodwill.
It mandates a stand-alone, signed notice document, which generic templates rarely include.
Colorado imposes a statutory civil penalty of $5,000 per worker for entering into or attempting to enforce a void covenant (C.R.S. § 8-2-113(8)).
An August 6, 2025 amendment (SB 25-083) further restricted the sale-of-business exception and tightened rules for health-care providers.
Choice-of-law and venue clauses that deprive a Colorado worker of the statute's protections are unenforceable (C.R.S. § 8-2-113(8)).
Frequently Asked Questions
What is Colorado's salary threshold for non-competes in 2026?
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A non-compete is void in Colorado unless the worker meets the highly compensated employee threshold, projected at $130,014 for 2026 under C.R.S. § 8-2-113. Customer non-solicitation covenants require at least 60% of that figure, roughly $78,008. The amounts are adjusted annually by the Division of Labor Standards.
Does Colorado require special notice for a non-compete?
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Yes. Under C.R.S. § 8-2-113(4), the employer must give the worker a separate, clear-and-conspicuous, signed notice of the covenant. Prospective workers must receive it before accepting the offer; current workers must receive it at least 14 days before the covenant takes effect.
What happens if a Colorado non-compete is invalid?
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Entering into or attempting to enforce a void covenant exposes the employer to a statutory civil penalty of $5,000 per affected worker, plus actual damages and attorney's fees, under C.R.S. § 8-2-113(8). The covenant itself is unenforceable against the worker.
Did the FTC ban change Colorado non-compete law?
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No. The FTC's 2024 rule was vacated in Ryan LLC v. FTC and removed from federal regulations in February 2026, so it has no effect. Colorado non-competes are governed by state law, principally C.R.S. § 8-2-113, which was independently tightened by HB 22-1317 and SB 25-083.
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