Legal Question in Employment Law in Colorado

Re: employee non-compete agreement

The information provided here is general in nature and not intended to answer any specific legal issue, nor does the provision of this information give rise to an attorney-client relationship. With that said, the enforceability will depend upon which state's laws apply and several other facts. The agreement may contain a governing law provision which should state what state's laws apply. Non-competes are presumptively invalid in Colorado unless they fit into one of 4 permissible categories: 1) part of the purchase and sale of a business; 2) designed to recover costs of training an employee whose employment with the employer lasted less than 2 years; 3) applies to executive or management personnel or officers and employees who are professional staff to execs/management; or 4) to protect trade secrets. I do not know what your position is, so I cannot tell you if the management/executive provision would apply. Unless the situation fits into one of these categories, the no-compete is invalid in Colorado.

In Wyoming, the presumption does not exist and the last time I checked, was not codified. Generally non-competes are valid if they are reasonable in terms of the restrictions - 3 years is reasonable under Wyoming case law, but I didn't see a geographical limitation (within 100 mile radius of Cheyenne, for example)- case law may support an argument against enforceability based upon the vagueness of the terms. The risky part here is that if you violate it, you could get sued and even if you win, lawsuits are expensive.

If you have real concerns (eg. you are currently operating or thinking about starting a competing business), it would be worth the time and money to consult an employment lawyer for an opinion on the validity of the non-compete. If the contract does not specify which state law controls, I'd recommend consulting with a Wyoming attorney first (assuming the place of the contract was Wyoming, the HQ of the business). If the contract states that Colorado law applies, then consult with CO counsel. A few hundred dollars is well spent for a solid legal opinion and you'd also have an attorney lined-up if the employer decides to take you to task under the agreement.