Colorado Becomes First State To Criminalize Void Non-Compete Agreements

Denver, Colo. (January 13, 2022) - Colorado recently became the first state to criminalize the use of void non-compete agreements. The law goes into effect on March 1, 2022 and makes it a class A misdemeanor for employers to implement void restrictive covenants.

In Colorado, non-compete covenants are void unless they relate to contracts for: (1) for the purchase and sale of a business or the assets of a business; (2) for the protection of trade secrets; (3) for the recovery of the expense of educating and training an employee under certain conditions; and (4) for executive and management personnel.

Thus, for example, an employer who asks an employee with no access to trade secrets to sign a non-compete agreement may be subject to criminal liability under the new statute.