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Colorado Criminalizes Use of Void Non-Compete Agreements

With a law going into effect on March 1, 2022, the state of Colorado will become the first state to criminalize, as a Class 2 misdemeanor, the use of “void” non-compete agreements (i.e., restrictive covenants).

Under the laws of Colorado, a non-compete is “void” unless it relates to a contract: (1) for the purchase and sale of a business (or its assets), (2) for the protection of trade secrets, (3) for the recovery of expenses of educating and training an employee, or (4) for executive/management personnel.

Under the new law, asking an employee to sign a restrictive covenant that does not fall into one of the four categories above can subject the offending employer to up to 120 days imprisonment, a $750 fine, or both.

This law does not, however, expand any of the existing laws, but rather implements a criminal penalty for violating the existing statutes governing non-competes.

For any additional employment or labor related questions, please call the attorneys at Assouline & Berlowe, P.A.

Eric N. Assouline, Esq.

ASSOULINE & BERLOWE, PA.

Miami – Ft. Lauderdale – Boca Raton

http://www.assoulineberlowe.com

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Filed under Business Litigation, commercial litigation, Labor & Employment